Broadband News

BT Group financial results for third quarter of 2017

The latest financial results from the BT Group are in and the publication of changes in the level of roll-out of full fibre (FTTP) on 1st February means we can concentrate today on the more usual cold figures from the results that cover the three months to the end of 31st December 2017.

The Openreach full fibre expansion with the aim of reaching three million premises by 2020, is of course covered in the results and the fact that some of these will be rural based in partnership with Government projects reflects that the 40 towns and cities are only just a first phase and the reality on the ground is that full fibre is popping up all the time all across the UK. The results also repeat the line that continued investment is reliant on the right environment and that utimately if people fail to buy better broadband services roll-out may be reviewed.

The superfast fibre footprint figures have had a tweak and that is these results and future results will report only those premises that Openreach believes can order a faster than 24 Mbps figure in its overall passed figure and this is reported as 27.4 million premises. Of course no use building it if no-one is buying services and the good news is that an extra 600,000 connections over the fibre network were ordered and connected taking the active footprint to 9.2 million premises. While many have predicted the demise of the phone line, while this may be true for telephone calls the Openreach physical line network grew by around 42,000 - though there is a question here of whether fibre only new build premises appear in this figure as this may explain the majority of that figure.

Capital expenditure was £477m, up £68m or 17%, reflecting our ongoing investment in fibre broadband speed and coverage which contributed to the Government’s achievement to provide superfast broadband coverage to 95% of the UK by December 2017. Capital expenditure was after gross grant funding of £55m (Q3 2016/17: £45m) directly related to our activity on the BDUK programme build which was offset by an increase in our grant funding deferral of £50m (Q3 2016/17: £32m).

Openreach on Capital Expenditure

The ultrafast footprint which is only reported as a combined FTTP and G.fast figure is 886,000 premises and we believe G.fast is a rapidly increasing part of this and is going to out strip the FTTP component very quickly, in the rush to celebrate the 3 million FTTP expansion many skipped the reality that the G.fast roll-out is not being scaled back and if you do get G.fast you won't be getting FTTP, though it has not been ruled out that if you are too far from the cabinet based pod that FTTP infill might not be used (NOTE: In the largely urban domain of G.fast to date, Mildenhall is an example of one of the less urban deployments, the majority of premises are within reach and some dense urban areas will see all premises on a cabinet able to order G.fast). In our efforts to continue with verification of provider figures now that the focus is shifting away from solely superfast more time and effort will go into the G.fast tracking and take-up and thus speed test results will be a key assistant in that task.

BT Consumer as the largest UK retail ISP continues to grow adding 35,000 broadband customers in the last quarter, and added 208,000 VDSL2/FTTP/G.fast connections in the quarter to give a fibre base of 5.5 million, which makes them the second largest UK broadband provider even if you ignore the ADSL/ADSL2+ customer base. The overall (all consumer fixed line broadband connections) figure of 9.3 million connection figure means the positionas the largest retailer looks set to remain so for many years. What may surprise some customers and observers was that revenue was flat year on year, impacted by things like decreasing call volume which may go some way to explaining the core product price rises on broadband.

Comments

"In our efforts to continue with verification of provider figures"

There was some clarity given last week about this.

Openreach are ahead of schedule and due to complete 1.1 mil premises passed with G.fast by the end of March. However, BT Wholesale have currently only passed around 190k premises for G.fast.

The reason for the discrepancy (and why people say they can see a G.fast pod but it's not live in the BT Wholesale checker) is that there need to be network upgrades and changes done by BT Wholesale, before they enable a cabinet for G.fast orders.

  • AndyCZ
  • 18 days ago

I assume the network upgrades being done by BT Wholesale in each exchange/handover to support G.fast products are fairly robust because they are providing a SLA for minimum throughput of ultrafast products (e.g. 330/50 has a SLA of minimum throughput of 195Mb/s on standard and 225Mb/s on elevated).

  • AndyCZ
  • 18 days ago

On forums we see lots of people reporting pods but not on order systems, and its a little like whether the 50 Mbps upload FTTP is available, i.e. new cable links (or higher capacity) in handover exchanges need ordering and installing.

There is a danger if the G.fast footprint growth outstrips ability to order by a large margin that it will get a vapourware reputation and this may damage uptake once the retailers start to push it.

  • andrew
  • thinkbroadband staff
  • 18 days ago

Yes, it seems like it's a much quicker job for Openreach to upgrade a cabinet compared to the backhaul upgrades that need to be done to support the newer products and speeds.

The same will apply to the 1Gig/500Mb FTTP speeds. Openreach need to make exchange level changes and BT Wholesale need to ensure there is enough backhaul capacity. So rather than appearing on the BT Wholesale checker for every circuit in the country, they will only appear in areas that have been upgraded (by both Openreach/BT Wholesale) to cope with those speeds.

  • AndyCZ
  • 18 days ago

@ AndyCZ
Nearly every property which has FTTC availability also shows up FoD 330/30 on the BT checker. This suggests that BT Wholesale have enabled the nearest (or head-end) exchange for the faster 300 Mbps products. So based on this why can't those with GFast pods installed order a service as their exchange will most likely support 300 mbps by BTW? Ok fair enough GFast has a 50 Mbps upload versus 30 Mbps upload on FoD but I wouldn't think a 20 Mbps increase would stop BTW enabling GFast cabs en-masse.

  • baby_frogmella
  • 18 days ago

With FoD, why would you install the headend capacity link ahead of anyone ordering it, when the build time for FoD normally gives time to order and install the headend link and remember FoD is not just a BT Wholesale product.

  • andrew
  • thinkbroadband staff
  • 18 days ago

@ baby_frogmella - I assume because FoD is a bespoke build and it is not likely there will be a large number of orders in the same area. Also, with FoD they have the time to ensure that their network can meet the speed demand.

With G.fast, the installation times will be quick relative to FoD and BT Wholesale will need to have the capacity to meet those demands from the get go. Say you had 50 people order the top tier 300Mbps product on the same cabinet within a week, that is a lot of bandwidth that they would have to be able to cope with.

  • AndyCZ
  • 18 days ago

Sorry, should read - 'relatively quick compared to FoD'

  • AndyCZ
  • 18 days ago

Fair enough, I guess BT Wholesale could upgrade the exchange DURING the FoD installation which takes 3+ months to install anyway.

AndyCZ you said "330/50 has a SLA of minimum throughput of 195Mb/s on standard". Yet the new BT Ultrafast 2 product (FTTP 330/50) only promises a minimum throughput of 100 Mbps at all times. Why would OR/BTW give a better SLA (nearly twice) to the GFast product? Surely they should be the same?

Also does the SLA on the new FTTP/GFast products have any bearing on the existing FTTP/FoD product SLAs? (which is believe is around 40 Mbps on the 300 Mbps service)


  • baby_frogmella
  • 18 days ago

The new BT Wholesale SLAs are only for the new speed variants (330/50 and 160/30).

I think 100Mbps is just a marketing number for BT Retail. They were the first to do it and it's a number at which ultrafast speeds begin.

  • AndyCZ
  • 18 days ago

Strange nothing about its shrinking BT TV customer base and increased costs to Gary Lineker and Clare Balding ?
Big problem heading for BT is delivering TV via ip. With satellite dishes becoming so Amstrad and Alan Sugar . Vodafone with the smart purchase of C&W old national business fibre network BT Consumer are in for a big kicking.

  • Marlon88
  • 15 days ago

Why do they keep putting prices up every year ,lots of people must be leaving cos its cheaper to use a mobile phone prepaid or contract ,how does one find out how many BT customers leave ?

  • paulinuk
  • 14 days ago

Churn if significant would be in the financial results, and if it really means a decreasing number of customers overall it will be readily visible.

  • andrew
  • thinkbroadband staff
  • 14 days ago

100mb is the speed guarantee if it drops below this you will get a £20 credit, this credit can be applied for only twice, The credit comes in a MasterCard which be spent at any stores that accept them.. G.Fast will be at 2million premises by the end of this financial year. April 2018. The SLA for 100mb is only got G.fast not for FTTP. There are no guarantees with FTTP.

Hope this helps.

  • AngusBT
  • 12 days ago

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