{"id":25823,"date":"2021-05-13T07:13:36","date_gmt":"2021-05-13T06:13:36","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=25823"},"modified":"2021-05-13T13:13:28","modified_gmt":"2021-05-13T12:13:28","slug":"bt-raise-fttp-broadband-target-to-25-million-uk-premises","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/05\/bt-raise-fttp-broadband-target-to-25-million-uk-premises.html","title":{"rendered":"BT Raises FTTP Broadband Target to 25 Million UK Premises"},"content":{"rendered":"

The BT<\/a> Group has published their latest Q4 2020\/21 results today, which reveals that Openreach<\/a> has further expanded their gigabit-capable Fibre-to-the-Premises (FTTP<\/a>) broadband ISP network rollout target from 20 million UK premises to 25 million by December 2026. The extended target will support an additional 7,000 jobs.<\/p>\n

At present Openreach<\/a>’s gigabit-capable FTTP<\/a> network is already available to over 4.6 million premises<\/strong> (homes and businesses) across the United Kingdom (here<\/a>), which previously aimed to cover 20 million at a cost of \u00a312bn by the mid to late 2020s. Some 3.2 million out of that planned build was due to be in rural or semi-rural villages and market towns (here<\/a>); these are all commercial builds.<\/p>\n

NOTE:<\/strong> The operator is currently building FTTP<\/a> at a rate of c.43,000 premises per week (1.9 million were added during 2020\/21).<\/div>\n

However, since the operator’s last set of results there have been a number of favourable regulatory decisions for BT<\/a> via Ofcom<\/a>’s recent market review (here<\/a>). Not to mention the Budget 2021 announcement of a \u201csuper deduction<\/em>\u201d tax policy for businesses that invest in new plant and machinery assets (here<\/a>) and the deployment of faster trenching machines (here<\/a>).<\/p>\n

Suffice to say that the BT<\/a> Group now feel as if they have the security and confidence to go a bit further and have added an extra 5 million premises to their UK coverage target (c.80% of UK premises), which also seems to push the cost up to \u00a315bn<\/strong>. Openreach<\/a> will start its build ramp up, reaching a peak of 4m premises a year, with immediate effect (previously they expected to peak with 3 million a year).<\/p>\n

BT states that they have the capacity to fund this additional build entirely from internal resources while continuing to stand by their other priorities, including investing in 5G<\/a> and its modernisation programme, committing to a minimum credit rating of BBB flat, supporting the BT Pension Scheme and reinstating its dividend in the current financial year at 7.7 pence per share.<\/p>\n

However, the operator also believes that it “could deliver further shareholder value by funding the additional 5m premises through a joint venture with external parties<\/em>” and will explore joint venture structures over the first half of the current financial year.<\/p>\n

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

“BT is already building more full fibre broadband to homes and businesses than anyone else in the UK. Today we are increasing our FTTP target from 20 million to 25 million homes and businesses to deliver further value to our shareholders and support the Government\u2019s full fibre ambitions.<\/p>\n

This has three massive benefits: it allows us to go faster, beefing up our capacity to build fibre to households and businesses; it allows us to go further, getting fibre to more people including in rural communities, and; it will help fuel UK economic recovery, with better connectivity and up to 7,000 new jobs.”<\/p><\/blockquote>\n

The huge development will come as welcome news for consumers, although alternative network (altnet) providers will no doubt be concerned about the additional competition as it will surely see Openreach pushing FTTP into areas that they had previously seemed set to neglect (i.e. the places where many smaller altnets are currently investing). Equally, Virgin Media<\/a>’s plan to build out to another 7 million premises may be impacted (here<\/a>).<\/p>\n

Elsewhere BT has today welcomed the Premier League’s in principle agreement for a 3-year renewal of their current broadcast agreement. This means, subject to terms, that until 2025 BT Sport will continue to show 52 exclusively live Premier League games per season. Sky’s existing roster also looks set to be maintained.<\/p>\n

BT also announced that it has reduced the carbon emissions intensity of its operations by a further 14% over the last 12 months. An overall reduction of 57% since 2016\/17 puts the company on track to reduce its overall carbon emissions by 87% by the end of March 2031.<\/p>\n

Summary of Group Results<\/strong><\/span><\/h3>\n

As usual BT Group have also published their latest quarterly results, which has been quite eventful and this was underlined by the major changes introduced via Ofcom<\/a>’s latest market review (here<\/a> and here<\/a>) and the related price rises at wholesale (here<\/a>), as well as plans for new full fibre discounts in the future (here<\/a>).<\/p>\n

Meanwhile, Openreach has now largely resumed normal operations after the recent lockdown (here<\/a>) and is separately having to tackle some FTTP capacity problems with telegraph poles in certain areas (here<\/a>). The network access provider has also made progress on their future FTTP Advanced<\/strong> product for businesses (here<\/a>).<\/p>\n

On top of that Openreach has confirmed their plans to extend FTTP to another 100,000 premises in Northern Ireland (here<\/a>). Outside that we’ve also seen EE<\/a> launch 5G<\/a> in 35 new locations (here<\/a>), while BT has launched a new social broadband tariff (here<\/a>) and is also considering the sale of their TV sport broadcasting business (here<\/a>).<\/p>\n

Overall, the BT Group should be looking toward a more positive future after several rocky years, except for the threat of a major national strike that is now looming over the operator (here<\/a> and here<\/a>).<\/p>\n

Financial Highlights – BT’s Quarterly Change<\/strong><\/span>
\n* BT Group revenue = \u00a35,286m (down from \u00a35,477m)
\n* BT Group profit after tax = \u00a3196m (down from \u00a3420m)
\n* BT Group total net debt = \u00a317,802m (increased from \u00a317,294m)<\/p><\/blockquote>\n

BT doesn’t report full customer figures for their own retail broadband ISP, but they have started doing it for their newest services. BT Consumer reported that they had 753,000 FTTP customers (up from 686K last quarter) and EE<\/a>’s “5G<\/a> Ready<\/em>” base now stands at 3.261 million (up from 2.141m). Meanwhile 82.4% of BT’s fixed consumer base now take a “superfast broadband<\/em>” service (up from 82.3% last quarter – mostly FTTC<\/a>) and this drops to just 5.5% (up from 4.8%) for their “ultrafast broadband<\/em>” (100Mbps+) products (G.fast<\/a> and FTTP).<\/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 +560,000 premises (up from +550K last quarter) and hybrid fibre G.fast<\/a> being unchanged. As most people know, G.fast<\/a> deployments have been suspended in favour of FTTP.<\/p>\n

\"openreach_q4_2020-21_network_coverage_and_takeup\"<\/p>\n

We normally expect the rapid rollout of any new technology to suppress take-up, but Openreach’s FTTP seems to be bucking this trend a bit. The results reveal that, across all ISPs, some 905,000 FTTP connections have now been made (up from 790k last quarter) and that equates to a take-up of 19.6% (up from 19.51% last quarter) – this is impressive. But when the operator ramps-up their build to meet the new target then this may slide a bit.<\/p>\n

\n