{"id":33594,"date":"2023-05-18T07:46:01","date_gmt":"2023-05-18T06:46:01","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=33594"},"modified":"2023-05-18T09:24:05","modified_gmt":"2023-05-18T08:24:05","slug":"bt-slows-fttp-build-as-cover-grows-to-10-27-million-uk-premises","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/05\/bt-slows-fttp-build-as-cover-grows-to-10-27-million-uk-premises.html","title":{"rendered":"BT Slows FTTP Build as Cover Grows to 10.27 Million UK Premises UPDATE"},"content":{"rendered":"

BT<\/a> Group has today published their latest Q4 FY23 (quarterly) results to March 2023, which saw Openreach<\/a>’s Fibre-to-the-Premises (FTTP<\/a>) broadband ISP network grow to cover 10.274<\/span><\/span><\/span> million premises (up by 702k in the quarter vs 810k last quarter) and EE<\/a> increase their 5G<\/a> Ready customer base to 9.12<\/span><\/span> million (up from 8.5m).<\/p>\n

Firstly, BT<\/a>’s consumer division – including EE<\/a> and Plusnet<\/a> – doesn’t publish full customer figures for their own retail ISP products, but they do report data for their “ultrafast broadband” (100Mbps+) packages and mobile service. The consumer ISP stated that they had 1.745 million FTTP<\/a> customers (up from 1.559m last quarter) and EE<\/a>’s “5G<\/a> Ready” base now stands at 9.122 million (up from  8.505m). The population coverage of 5G<\/a> also now stands at 68% of the UK.<\/p>\n

NOTE:<\/strong> Openreach<\/a>’s average FTTP<\/a> build rate is now 54,000 premises per week (down from 62k) and they’re investing \u00a315bn to cover 25 million UK premises by Dec 2026. Some 6.2 million of those will be in rural or semi-rural areas.<\/div>\n

Meanwhile, some 75.5% of BT<\/a>’s fixed consumer base take a “superfast broadband” product (down from 77% last quarter) and 16.8% (up from 14.7%) have adopted one of their “ultrafast” products – including both G.fast<\/a> and FTTP. We also noted that 21.6% of BT’s customers are now taking both mobile and broadband (converged), which is unchanged from last quarter.<\/p>\n

Financial Highlights – BT’s Quarterly Change<\/strong><\/span>
\n* BT Group revenue = \u00a35,089m (down from \u00a35,212<\/span><\/span><\/span>m)
\n* BT Group total reported net debt = \u00a318,859m (decreased from \u00a319,226m)
\n* BT Group profit after tax = \u00a3585m (up from \u00a3427m)<\/p><\/blockquote>\n

Clearly, Openreach<\/a>’s move last year to focus on cost savings in their FTTP build (here<\/a>) has had an impact on their deployment pace, although they continue to maintain that they’ll be able to hit their 25 million premises target on time. But this suggests that they’ll need to maintain a higher rate of build for longer in the future to compensate, which is something we’ve yet to see.<\/p>\n

At the same time BT’s CEO has spoken of his aim to turn the operator into a “leaner business<\/em>” and, with that in mind, they appear to be planning to cut up to 55,000 more jobs (about 40% of their entire 130,000 strong workforce) by the end of this decade, as part of a cost-cutting drive. No doubt that’ll go down well with the unions.<\/p>\n

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

The table below offers a breakdown of fixed line network coverage and take-up by technology on Openreach’s 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

\"Openreach-FY23-Q4-network-coverage-and-takeup\"<\/p>\n

As usual, the rollout of their Fibre-to-the-Premises (FTTP) lines continues to grow, with 702,000 premises being added in the quarter, although that’s clearly down from 810,000 last quarter. As for take-up, some 3.123 million FTTP broadband connections have been made on Openreach’s network (up from 2.729m), which equates to a take-up of 30.4% (up from 28.51% last quarter) and that’s extremely impressive.<\/p>\n

The rapid rollout of a new network almost always tends to suppress the take-up figure, thus Openreach continues to do extremely well to buck that trend – all despite an increasingly significant amount of competition from rival networks. This also goes to highlight the challenge AltNets are facing in peeling consumers away from the resident industry giant.<\/p>\n

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

“We have delivered our outlook for FY23: this year we\u2019ve grown both pro forma revenue and EBITDA for the first time in six years while navigating an extraordinary macro-economic backdrop. Over the last four years we have stuck firmly to our strategy and it\u2019s working.<\/p>\n

Openreach is competing strongly and it\u2019s clear that customers love full fibre. The Openreach Board has reaffirmed its target to reach 25 million premises with FTTP by the end of 2026 and plans to further accelerate take-up on the network. In Consumer we\u2019re delivering for customers with strong growth in FTTP and 5G, and we\u2019re also seeing green shoots in B2B with a return to revenue growth in the final quarter in Global and the creation of our newly integrated Business unit.<\/p>\n

By continuing to build and connect like fury, digitise the way we work and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base. New BT Group will be a leaner business with a brighter future.”<\/p><\/blockquote>\n

Interestingly, BT’s results also included some new metrics, which appears to predict what the group will look like by the end of this decade. This is where the job cut data comes from, but is also gives us an insight into the fact that Openreach may expand their FTTP broadband rollout to cover up to 30 million premises by around 2030.<\/p>\n

We say “may<\/em>” because this is an ambition and, much like all those AltNet aspirations for future build, should be taken with a pinch of salt.<\/p>\n

Key transformation metrics<\/strong><\/span><\/p>\n

By the end of the decade, BT Group will be transformed, connecting for good and leading nationwide next- generation networks with best in class customer service and solutions.<\/p>\n

In FY28-FY30, BT Group’s transformation will be reflected in:<\/p>\n

\u2022 Reduction in total labour resource from 130k to between 75-90k
\n\u2022 Increase in Openreach FTTP premises passed from 10.3m to between 25-30m
\n\u2022 Increase in Openreach FTTP take-up from 30% to between 40-55%
\n\u2022 Increase in retail FTTP take-up from 1.8m to between 6.5-8.5m
\n\u2022 Increase in 5G UK population coverage from 68.1% to >98%, and 5G connections from 8.6m to between 13.0m-14.5m
\n\u2022 Increase in Group NPS from 22.1 to between 30-35<\/p><\/blockquote>\n

Finally, BT also highlights how much they’ll benefit from the UK Government’s new “full expensing<\/em>” scheme, which was announced in the budget: “We expect to be a significant beneficiary of the UK Government’s full expensing scheme from FY24-FY26 and expect to pay no UK cash tax for the next three years. With demand for FTTP well ahead of our expectations, we will reinvest this benefit into further accelerating our FTTP connections and absorbing inflation whilst remaining committed to our target of building to 25m premises by the end of 2026, bringing our annual capex outlook to \u00a35.0-5.1bn for FY24-FY26 inclusive. We expect take-up to accelerate beyond 30% whilst maintaining our build cost envelope of \u00a3250-\u00a3350 per premises<\/em>.”<\/p>\n

\n
 <\/div>\n
BT.A Quotes<\/span><\/a> by TradingView<\/div>\n