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BT announce first quarter results which show fibre growth
Thursday 25 July 2013 09:08:52 by Andrew Ferguson

16 million UK premises are now able to order a FTTC service (a smaller subset full FTTP) and some 1.7 million homes and businesses have done so, though the bulk of this (1.5 million) are still with the retail arm of BT in the form of the BT Infinity product.

The latest financial results from BT reveal a few facts, BT Retail has some 6.8 million broadband customers, an additional 97,000 customers in the last quarter. The BT Infinity product is where the real growth is though, with 197,000 new connections (mixture of new customers and existing BT customers upgrading). BT Sport has been ordered by some 500,000 households, so while there are question marks over the money spent to acquire the various rights, the appeal of sport should never be ignored.

The results for Openreach are interesting, as a common complaint is that Openreach does not roll-out its FTTC service to areas where lots of businesses exist to protect leased line revenue, but the financial figures show that revenue from the fibre sales has doubled, there has also been a 5% growth in Ethernet revenues, the growth in sales helping to offset regulatory imposed price changes that overall caused a 2% decline in revenue for Openreach. The last quarter saw 265,000 net fibre connections, with 68,000 of these outside the BT Group via operators like Sky, TalkTalk, EE, PlusNet and the other 80 or so providers selling Openreach fibre products. While this figure for external sales looks low, it is a three fold improvement showing that the fibre products are gaining traction.

The issue of where Openreach decides to roll-out its FTTC or FTTP products is contentious, but a simplistic view is that they attempt to model the likely sales from each cabinet, and as business parks tend to cover a large foot print the density of lines and hence sales is perceived as probably being lower. Also standard FTTC products are not designed for uncontended leased line use, there are variants available which cater to this sector, but not at the £10 to £30 premium per month that the residential products command. There is the even simpler view, with a coverage target of two thirds of the UK there was always going to be millions of people ready to complain they had been missed by the roll-out. In some ways this limited roll-out which has been known about for some years, should have been a gift to competitors to roll-out their own fibre infrastructure to businesses.

"We won a further nine Broadband Delivery UK (BDUK) regional bids to deploy fibre broadband including Cheshire, Durham, Coventry, Solihull & Warwickshire and West Sussex. We have now won a total of 29 regional bids. The programme will have a long payback but, unlike other companies, we have committed the capital and are focused on helping the UK achieve its short-term goal of more than 90% fibre availability. The UK is seen in many countries around the world as an exemplar of what can be achieved by government and private sector working together."

BT Results on BDUK projects

The number of BDUK projects which are underway now means that the push to increase fibre availability beyond the previously announced commercial envelope features in the results, with the cautionary tale that the short term nature of the goals still has a long term payback period, BT is apparently operating to a 15 year payback period in the BDUK areas, as opposed to a 12 year period in its commercial footprint.

Comments

Posted by embarkell over 3 years ago
Surely Plusnets numbers are rolled into Retails and are therefore not outside of Group ;)
Posted by fastman over 3 years ago
Plusnets are a standalone business and will not be rolled into retails number as they are direct contract with BT Retails
Posted by fastman over 3 years ago
only Retails number will be in Retails
Posted by herdwick over 3 years ago
"£10 to £30 premium per month that the residential products command"

BT Infinity 1 is £5/month more than their cheapest Broadband package, or £1/month cheaper than their unlimited broadband.
Posted by chrysalis over 3 years ago
Ian did a good job as CEO I feel, before he tookover BT were stagnant refusing to invest. FTTC is his pet project.
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