Broadband News

498,000 Openreach GEA fibre connections added in last quarter

The third quarter results from the BT Group are now available and detail the groups performance up to 31st December 2016.

The quarter saw an extra 498,000 connections on the GEA platform, i.e. FTTC, FTTP or G.fast trial and providers outside the BT Group accounted for 48% of those additions. This means that 7.2 million premises are now taking a service which represents take-up of 27% of those passed.

"The good progress we’re making across most of the business has unfortunately been overshadowed by the results of our investigation into our Italian operations and our outlook. We’ve undertaken extensive investigations into our Italian business, including an independent review by KPMG, and I am deeply disappointed with the unacceptable practices by some that we’ve found. This has no place at BT, and it undermines the good work we’re doing elsewhere in the Group. We are committed to ensuring the highest standards across the whole of BT.

We face a more challenging outlook in the UK public sector and international corporate markets but we’ve seen record growth at EE, strong momentum in Consumer, and our highest ever fibre net connections in Openreach. Customer experience remains a top priority. EE is now answering 100 per cent of its customers’ calls in the UK and Ireland. In Openreach, missed appointments have halved year on year. We’ll continue to invest to ensure our service levels improve and that our customers see the benefit.

We are pushing ahead with reforms at Openreach, particularly on governance and customer service and continue to believe an agreement can be reached with Ofcom on its Digital Communications Review. We think these changes address Ofcom’s concerns and can form the basis for a fair, proportionate and sustainable settlement.

Gavin Patterson, Chief Executive

The roll-outs in the last quarter from Openreach have largely been BDUK or privately gap-funded based, but there is some commercial roll-out in the 250,000 premises passed in the quarter, this additional coverage takes the raw volume to over 26 million premises by the GEA products. We should highlight that being passed by an Openreach VDSL2 service does not guarantee superfast speeds, hence all the time invested in our tracking of the roll-outs.

The increasing take-up is important for Openreach, as while revenue was down 1%, there was actually an impact of some £60m due to the impact of regulation with the growth in revenue from fibre based connections almost negating that. This growth does come at a cost, with capital expenditure running at £409m in the quarter (up £88m from same quarter last year), the level of gross grant funding was £45m (£35m lower than same quarter in 2015) and offset by deferral of £32m of the total grant funding.

With respect to the plans Ofcom has for Openreach, there is the new Openreach Board Chairman in the form of Mike McTighe, and Openreach is reporting that missed appointments have halved year on year and on the sixty metrics Ofcom sets they are exceeding these copper based minimum service targets. Ethernet orders are still not perfect in times of delivery timeframe but this is apparently improving with the backlog being cleared slowly.

Looking at the consumer side, which for the majority of the public is still seen as the face of BT Group. The Consumer section of the report does seem to conflate the meanings of fibre based and superfast fibre several times, so when they report 'Superfast fibre broadband growth continued with 260,000 retail net additions, taking our customer base to 4.7m' we take this to mean that they added 260,000 customers on a BT Infinity service, which while the advertised speeds are up to 52 Mbps and up to 76 Mbps the service is sold to people who will be getting non-superfast speeds (i.e. sub 24 Mbps) and for those with sub 15 Mbps estimates they are sometimes not allowed to order Infinity but a product that will perform the same but not be counted as Infinity in advertising, thus not affecting the average speed or 10% advertised speed. Either way with 51% of customers on the fibre products this is impressive and at 4.7 million customers means they are rapidly catching Virgin Media and if the growth continues may pass them in 2017 to have the largest fibre based customer base. With some 9.2 million retail broadband customers BT Consumer is the largest retail provider by a large margin, and the question is how to encourage more of the 4.5 million ADSL/ADSL2+ customers to upgrade.

Comments

Do we know what percentage of ADSL/ADSL2 customers would both be able to upgrade (not on EO lines or non-fibre-enabled cabinets) and benefit something from the upgrade (not on long lines from fibre enabled cabinets)? And how do the percentages from the "capacity delays" article transform to numbers of ADSL users?

  • hvis42
  • 9 months ago

It is a little annoying that BT seem to have slightly reverted to calling "fibre broadband" as "superfast fibre broadband" again.

However, it looks like they are now having to refer to "ultrafast" in the reports now, so I guess they are trying to distinguish between the two types of fibre (or not-fibre, as the case may be).

I count 11 "fibre broadband", 3 "superfast fibre broadband" and 4 "ultrafast broadband"

  • WWWombat
  • 9 months ago

Some form of fibre broadband with no speed qualifiers is available to 95% of premises, once you add a 24 Mbps (superfast) qualifier drops to 92.3%. So its clear if a provider has just under half its customers on ADSL2+ that many do have the option to upgrade.

As for capacity delays, not sure I follow what you want numbers wise.

  • andrew
  • thinkbroadband staff
  • 9 months ago

NGA's takeup increase of 498,000 is the highest quarterly figure yet. Passing 250,000 is the lowest quarterly figure since (it seems) the pilots back in 2009.

And, presumably, now that 51% of BT Retail's subscribers are on a fibre-based service, any speeds labelled "median" will now show fibre-based capability, rather than ADSL.

  • WWWombat
  • 9 months ago

BT are keeping their BDUK takeup threshold at 33%.

A quick tally of the various statements on BDUK grants (and deferred grants) tells us
- That BT have taken in £945m in grant money from LA's
- That BT have deferred £325m of that in the accounts

So almost exactly one-third of the money is heading back to the local authorities.

  • WWWombat
  • 9 months ago

Incidentally, passing only 250,000 premises in the quarter is half that of a year ago, which was itself half the figure of a year previously.

"Premises passed" is now happening at a rate that is one-sixth of the peak in 2012 (6m passed that year).

But it doesn't look like the rate-drop is because of a fall in spending - Openreach capex now seems to be at its highest. These premises really are that much more expensive to reach...

  • WWWombat
  • 9 months ago

I am not sure whether I understood the headline correctly: Has BT really added 498,000 fibre lines? That would have been a huge increase compared to the roughly 2 Million FTTP coverage (the uptake even much smaller than that!) reported last year.

  • JNeuhoff
  • 9 months ago

I am just curious how much of these 4.5 million customers need to be "encouraged" to migrate from ADSL to something faster, and how many are stuck with it as there is nothing else available.

If the goal is to get ADSL numbers down, how much can be done with "encouragement" and what is the share that needs investment?

  • hvis42
  • 9 months ago

GEA Fibre - as in the collective name for GEA-FTTC, GEA-FTTP and GEA-G.Fast products

NOTE: No-one (or collectively) has 2 million FTTP coverage at present either

The second paragraph I believe makes it clear what the headline is referring to.

  • andrew
  • thinkbroadband staff
  • 9 months ago

@hvis42 Worst case, BT ADSL2+ customers are all in the areas without superfast option, but that is only 2.2 million premises. So worst case there are 2.3 million with a superfast option.

Reality is going to be higher than that, as take-up of broadband is not 100% across the UK.

Its someone thing can be worked out, but with all the possible ways of looking at the data, cannot re-jig data to every permutation.

  • andrew
  • thinkbroadband staff
  • 9 months ago

@hvis42 - My mom and dad get around 15-16mb so for occasional web browsing and bit of Streaming on Now TV its perfectly fine. They can get Fibre, no reason for them to do so.

  • Kebabselector
  • 9 months ago

Interesting sentence about new developments in there too.
"Our ultrafast broadband deployment plans are on track and we’re now offering to connect FTTP free of charge to developers of 30 or more homes, as well as continuing to roll out our G.fast pilots."
So continue to encourage (hassle) developers to provide it when we are looking at buying new houses.

  • jumpmum
  • 9 months ago

Hi Broadband Watchers.
With 498K customers added to the platform in the last Q and Openreach engineers on stand by to cover day 6 if the contractors are unable to keep up with churn rate this started on 6 Jan. Openreach will drip feed the new Cabs in so to control the situation leading up to the provision of G/Fast starting Q1 this is my own observation. Adsl will be involved with this churn rate.

  • Blackmamba
  • 9 months ago

Andrew, what were you envisioning when you said, "and the question is how to encourage more of the 4.5 million ADSL/ADSL2+ customers to upgrade"? If people are happy with a limited service at a low cost, why might they wish to 'go faster' while their money 'goes faster'?

  • davidinnotts
  • 9 months ago

@andrew: Sorry for the confusion, the 2 Million figure was of course BTs planned FTTP to 2 million premises by 2020.

Thanks for the clarification about "GEA fibre" which, if I understand you correctly, mostly isn't fibre, rather it's VDSL.

  • JNeuhoff
  • 9 months ago

@WWWombat

The interesting thing will be if the LAs spend on expansion or want the money back for something else.

If bac for something else, then 50% will go back to BDUK thence the treasury.

We'll have to see if any LAs are that desperate for cash...

  • themanstan
  • 9 months ago

Hi Wombat.
With Surrey asking for a 15% increase in council tax and they have reinvested the clawback money OMR back into the fibre infrastructure starting Q1 time will tell if this was a good investment I exspect MR Saffron will be pleased.

  • Blackmamba
  • 9 months ago

@JNeuhoff I believe the following is clear enough:
"The quarter saw an extra 498,000 connections on the GEA platform, i.e. FTTC, FTTP or G.fast trial"

  • andrew
  • thinkbroadband staff
  • 9 months ago

@theman
I haven't seen an LA decide against it, yet, though CDS are deferring until they know where Gigaclear will choose to go.

Of course, the framework contracts only allow them to actually get their hands on 50% of the clawback until the contract is over (2022ish).

  • WWWombat
  • 9 months ago

@andrew: OK, I think I get it. You were using the term 'fibre connections' when in reality it was mostly about VDSL connections, and very little fibre connections. I wish Virgin and BT would stop confusing users with misleading terminologies!

  • JNeuhoff
  • 9 months ago

OK, @JNeuhoff, we get it. You don't like that BT and Virgin have chosen to use that terminology, nor do lots of others, but the thing is ... they've been doing it years, and they're consistent.

It really isn't going to get anyone to change if you come on here and complain in every story that use the word fibre.

  • WWWombat
  • 9 months ago

@WWWombat: This was not a complaint, just got confused at the headline till I read the article, after Andrew posted his explanation.

You do realise that BT also does fibre connections (e.g. Infinity 4), so do some other telecoms, like CityFibre or Gigaclear. BT even plans to add another 2 Million fibre connections (or rather, coverage) by 2020 from what I have read in the news media.

  • JNeuhoff
  • 9 months ago

@JN
Of course I realise it.

But I've spent the last 7 years fully used to the way the different companies use their terminology, and adjust the way I read and assimilate their information accordingly. I assume I'd be confused if I too spent those 7 years railing against their choice of words.

For instance, CityFibre love to rename every city they touch as the "next Gigabit City", irrespective of the fact that gigabit services are already available. I take it with a pinch of salt.

  • WWWombat
  • 9 months ago

@JNeuhoff So you actually posted a complaint about the title before reading the article and never even noticed the second paragraph?

On CityFibre there is the new term addressable for the number of fibre to the premises

  • andrew
  • thinkbroadband staff
  • 9 months ago

@WWWombat: Talking about CityFibre: According to their website, its "infrastructure currently reaches 4 million homes". I seriously doubt that!

  • JNeuhoff
  • 9 months ago

@JNeuhoff
Perhaps they are following Finnish standards ... where the fibre just has to be within 1km.

  • WWWombat
  • 9 months ago

My exchange is FTC enabled so I can have FTC speeds, wonderful. However when I do a forcast speed test for fibre I get a max speed of 6Mb which is slower than the ADSL speed I get of 7.9Mb on standard copper. So I must assume the cabinet is further away than the exchange! I expect I and all in my village are counted as having FTC availability?

  • happyhacker
  • 9 months ago

It is possible to have slower FTTC speeds than ADSL2+, but they would not have built the cabinet if no-one benefited.

Its not that the cabinet is further away from the exchange (usually) but that the VDSL2 signal does not travel as far as the ADSL2+ signal. The joy of physics.

  • andrew
  • thinkbroadband staff
  • 9 months ago

@happyhacker
You'd be counted as having fibre but not superfast broadband.

Depending on the county and size of the village, you may yet have a new cabinet installed locally to give much faster speeds. Worth checking with the local county council project team?

  • New_Londoner
  • 9 months ago

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