BT Openreach looks into full-fibre broadband

Following the UK government's announcement that it is kicking off a full-fibre broadband fund, BT Openreach has said it will consult with industry and consumers on rolling out a fibre-to-the-premises network.
Written by Corinne Reichert, Contributor

United Kingdom telecommunications provider BT has announced that broadband arm Openreach is now consulting with industry and consumers on potentially rolling out a full-fibre broadband network.

"We aspire to be the UK's digital champion. To achieve this, we're ready to invest in the UK's digital infrastructure, in continued improvements in our customer service, and in new technologies to further enhance customer experience," BT CEO Gavin Patterson said.

"To that end, Openreach has today announced that it is consulting with customers and industry stakeholders on the business case that could support better rural broadband and a large scale fibre-to-the-premises rollout across the UK."

The announcement follows the UK government in November saying it would be replacing the predominantly fibre-to-the-node (FttN) network currently being rolled out across the UK by BT with fibre to the premises (FttP), announcing a £1 billion fund that it hopes will kickstart private investment in both fibre and 5G mobile connectivity.

"Our future transport, business, and lifestyle needs will require world-class digital infrastructure to underpin them. So my ambition is for the UK to be a world leader in 5G," Chancellor Philip Hammond said in the Autumn Statement.

"That means a full-fibre network; a step-change in speed, security, and reliability.

"So we will invest over £1 billion in our digital infrastructure to catalyse private investment in fibre networks and to support 5G trials."

To further incentivise industry investment in connectivity, the government also said it would grant 100 percent business rates relief on new fibre infrastructure for a five-year period.

BT made the announcement during its annual financial results on Thursday, also revealing that Openreach made £5.098 billion in revenue during the year ending March 31, down slightly from the £5.1 billion it made last year.

BT said it has also halved the number of missed Openreach engineer appointments during the 12-month period, now reporting 95 percent of installations occurring on time, and will be recruiting an additional 1,500 trainee engineers by the end of October to further improve its customer service.

The Openreach broadband network passed 26.5 million premises by the end of March, while its ultrafast network -- comprising fibre-to-the-premises (FttP) and G.fast connections -- has passed 500,000 premises.

Openreach's entire retail broadband base consists of 9.3 million customers, with fibre broadband customers numbering 4.9 million as of the end of March. The company is now connecting developments of 30 or more homes with FttP for free, and is undertaking 17 additional G.fast field trials.

BT, which consists of six customer businesses -- Consumer, EE, Openreach, Business and Public Sector, Global Services, and Wholesale and Ventures -- also revealed annual earnings before interest, tax, depreciation, and amortisation (EBITDA) of £6.74 billion, up by 8 percent, on revenue of £24.1 billion, up 27 percent year on year.

Operating profit, however, was down by 12 percent to £3.17 billion, due to what Patterson labelled "a challenging year" for the company -- including Openreach's fine from the regulator, and a finding that BT's Italian-based business had been undertaking "unacceptable practices".

In regards to its mobile business, BT said its 4G network will reach 92 percent geographic coverage throughout the UK as of September, and 95 percent by December 2020. It currently reaches 80 percent geographically, which accounts for 99 percent of the population.

BT's mobile base now has 30 million customers, with an average revenue per user (ARPU) of £26.30 across post-paid and £4.40 on prepaid per month.

The telco also made note of its pay TV business being bolstered by winning the exclusive broadcast rights to the UEFA Champions League and Europa League football competitions until 2021. Pay TV customers numbered 1.7 million as of the end of March, with BT Sport's average audience growing by 12 percent.

BT also used the opportunity to announce the appointment of its new Global Services Business CEO, Bas Burger, formerly BT Americas president, as of June 1.

"Global Services has developed world-leading products and services. This, combined with our strong relationships with our customers, puts us in a strong position to enable the digital transformation of their businesses," Burger said.

"I look forward to continuing to build this position, deliver on our strategy, and drive growth in Global Services' strategic portfolio of networking, cloud-based unified collaboration, hybrid cloud services, and security."

Alongside the new chief executive appointed to the business, BT will also undertake a restructure of its Global Services arm with a view to becoming more digitised, with around 4,000 managerial and back-office roles to be removed.

"Technology trends mean that we are now less dependent on owning physical local network assets around the world, creating the opportunity to reposition Global Services as a more focused digital business," Patterson said.

"We are therefore restructuring our Global Services organisation to enable this strategic refocusing."

Alongside other transformation programs within the business, BT said this restructure will save a total of approximately £300 million over the next two years.

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