{"id":24583,"date":"2021-02-04T08:06:19","date_gmt":"2021-02-04T08:06:19","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=24583"},"modified":"2021-02-04T08:07:54","modified_gmt":"2021-02-04T08:07:54","slug":"bt-group-build-1gb-fttp-broadband-to-4-1-million-uk-premises","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/02\/bt-group-build-1gb-fttp-broadband-to-4-1-million-uk-premises.html","title":{"rendered":"BT Group Build 1Gb FTTP Broadband to 4.1 Million UK Premises"},"content":{"rendered":"

The BT<\/a> Group’s latest Q3 2020\/21 results reveal that Openreach<\/a>’s G.fast<\/a> and Fibre-to-the-Premises (FTTP<\/a>) based “ultrafast broadband<\/em>” (100Mbps+) network now covers a total of 6.88 million UK premises, with 4.05m coming from FTTP<\/a> alone (up from 3.5m last quarter). The take-up rate for their full fibre services has also improved.<\/p>\n

The past quarter as been quite an eventful one for the national operator. Openreach<\/a> confirmed they would hire another 5,300 engineers and swap all of their vans for EVs (here<\/a>), but at the same time the CWU have continued to threaten strike action over changes to redundancy terms for job losses elsewhere (here<\/a>). Meanwhile the CEO of BT<\/a> Group, Philip Jensen<\/strong>, said that he was “open minded<\/em>” about the possibility of selling a “minority<\/em>” stake in Openreach to help fund their \u00a312bn FTTP rollout (here<\/a>).<\/p>\n

NOTE:<\/strong> Openreach has so far covered 4.05 million premises with FTTP and they expect to hit 4.5m by March 2021 (current build rate of c.42,000 per week), then 5.8m by September 2021 and 20m by around 2025-30. A max build rate of 3 million per year is envisaged.<\/div>\n

Elsewhere, BT launched their new Halo 3+ product to more closely combine the benefits of WiFi<\/a>, mobile and broadband (here<\/a>), while Openreach extended their copper to fibre migration path to a second batch of 51 exchange areas (here<\/a>) and, separately, drew some criticism for a letter they sent to a local authority in Northern Ireland (here<\/a>). We also got a sneak peek at Openreach’s new 4 port ONT for FTTP lines (here<\/a>) and the network operator was forced to delay some installs due to the new lockdown (here<\/a>).<\/p>\n

Meanwhile BT has finally signed the last R100 broadband rollout contract (LOT 1) for Scotland (here<\/a>) and were separately fined \u00a36.3m for breaking Ofcom<\/a>’s rules during a tender for the recent \u00a350m Northern Ireland Public Sector Shared Network contract in 2017\/18 (here<\/a>). Lastly, Openreach has unveiled plans to close 4,600 UK exchanges (here<\/a>) and they’re taking TalkTalk<\/a> to court in a dispute over unpaid bills for Ethernet (here<\/a>).<\/p>\n

Financial Highlights – BT’s Quarterly Change<\/strong><\/span>
\n* BT Group revenue = \u00a35,477m (up from \u00a35,357m)
\n* BT Group profit after tax = \u00a3420m (up from \u00a3408m)
\n* BT Group total net debt = \u00a317,294m (decreased from \u00a317,627m)<\/p><\/blockquote>\n

Sadly, BT doesn’t report full customer figures for their own retail broadband ISP, but they have started doing it for their newest services. For example, BT Consumer reported that they had 686,000 FTTP customers (up from 598K last quarter) and EE<\/a>’s “5G<\/a> Ready<\/em>” base now stands at 2,141 million (up from 1.23m). Meanwhile 82.3% of BT’s fixed consumer base now take a “superfast broadband<\/em>” service (down from 82.4% last quarter – mostly FTTC) and this drops to just 4.8% (up from 2.7%) for their “ultrafast broadband<\/em>” (100Mbps+) products (G.fast<\/a> and FTTP).<\/p>\n

Separately BT’s KPIs also reveal that the total gross<\/em> BDUK<\/span> grant funding deferral (clawback) included in capacity\/network remains unchanged<\/em> on \u00a3788m<\/strong>. <\/span>This reflects public money that is either in the process of, or could in the future be, returned by BT and reinvested by councils to help boost superfast broadband coverage. A big chunk of this has already been re-invested into such contracts or provisionally allocated to future ones.<\/p>\n

Openreach’s Network
\n<\/strong><\/span><\/h3>\n

The table below offers a breakdown of fixed line network coverage and take-up by technology on Openreach’s national UK network, which covers the totals for all ISPs that take their products combined (e.g. BT, Sky Broadband<\/a>, TalkTalk<\/a>, Zen Internet<\/a>, Vodafone<\/a> etc.).<\/p>\n

The roll-out of full fibre lines remains the dominant one amongst the two “ultrafast<\/em>” technologies, with FTTP adding +550,000 premises (up from +521K last quarter) and hybrid fibre G.fast being unchanged. As most people know, G.fast deployments have been suspended in favour of FTTP (due to be reviewed in March 2021, but no change is expected). We note that the FTTP build rate is now 42,000 premises per week (up from 40K).<\/p>\n

NOTE:<\/strong> BT Group are investing \u00a312bn<\/a> into their national FTTP deployment.<\/div>\n

\"openreach_q3_2020-21_network_coverage_and_takeup\"<\/p>\n

Openreach claims that there has been a “strong increase in sales in Q3<\/em>“, with the network access provider achieving a “record<\/em>” of 17,000 FTTP orders per week. The results reveal that, across all ISPs, some 790,000 FTTP connections have now been made (up from 655K last quarter) and that equates to a take-up of 19.51% (up from 18.71% last quarter) – this is impressive given the rapid rollout pace (take-up is usually suppressed by a rapid deployment).<\/p>\n

Meanwhile the take-up of their G.fast service stands at just 6.25% (up from 4.87% last quarter), which is extremely poor given that their rollout of this technology has been on pause for the past year (i.e. we should be seeing much better take-up by now). The decision to focus on FTTP instead was clearly the right one.<\/p>\n

Philip Jansen, CEO of BT Group, said:<\/strong><\/p>\n

“During the current Covid-19 pandemic, BT has continued to deliver for our customers and invest in our networks, our modernisation programme, and our products and services in recognition of the ever increasing need for improved and faster connectivity. We delivered results in line with our expectations for the third quarter and remain on track to deliver our 2020\/21 outlook despite even greater Covid-19 restrictions than previously forecast. BT has shown again that it has the spirit and determination to step up and deliver for our customers, keeping them connected with a range of initiatives. I am particularly proud of the ongoing work and investments we are making to support school children, SMEs and the NHS during the pandemic.<\/p>\n

We continue to make significant investments in our industry leading networks; with FTTP having now passed over 4m premises and 5G<\/a> available in 125 towns and cities, we’re firmly on track to deliver our March 2021 targets. Openreach FTTP orders accelerated even further to reach another record level of 17k per week. We have demonstrated continued improvement in our operational performance, including acceleration of FTTP and 5G take-up, and customer satisfaction metrics. This reflects our progress in creating valued, reliable, stand out customer experiences and propositions; the next evolution of our flagship convergence proposition, Halo 3+, will drive even further progress.<\/p>\n

As the WFTMR2 consultation process draws to a close we’re focused on ensuring the new regulation will create an environment to allow for fair returns across our industry including the additional significant network investment we are poised to undertake. The latest proposals from Ofcom<\/a> are positive for investment in many areas, but there are key points of clarity still needed to unlock the fibre investment the country needs; and we still need to see concrete progress from Government on the things they can do to support the fibre roll out.<\/p>\n

With no material impact expected from the Brexit deal and our resilient results so far this year I remain confident in our EBITDA expectation of at least \u00a37.9bn for 2022\/23. Looking further ahead our new Digital unit will enable us to accelerate our digital and business transformation programmes and to deliver digital platforms that bring together best-in-class services for our customers, further securing a brighter and more sustainable future for the group.”<\/p><\/blockquote>\n

The BT Group clearly has a few challenges ahead of it, not least in terms of a forthcoming clash with the unions over jobs and securing enough funding to help fuel their FTTP rollout until 2025. On top of that Openreach faces rising competition from a growing base of rival alternative full fibre networks, many of which will be bidding against them in the Government’s new \u00a35bn gigabit broadband programme.<\/p>\n

On the other hand, we’d say that the road ahead is starting to look a lot clearer, and arguably smoother too, than the road they’ve been travelling down for the past few years.<\/p>\n

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