Openreach shifts from third gear to fourth with increased FTTP roll-outs
The current goal of 3 million FTTP premises passed by Openreach is a target that was looking increasingly likely to be met early due to the increased pace of roll-out seen in 2019 and Openreach has announced it is to ramp things up further by increasing the target of 4 million premises before the end of the 2020/2021 financial year i.e. by 31st March 2021.
This is a huge vote of confidence in Openreach and our people.
I’m delighted that our engineers are rising to the task, and that we’ve been backed by our shareholder to go even further.
We now intend to reach an extra one million premises within our original timeframe, meaning [four million] homes and businesses will have access to a full fibre to the premises (FTTP) service over our network by the end of March 2021.
During the last year we’ve been building, hiring and training more than ever. And we’re proving that Openreach can deliver against some very challenging commitments.
At the same time as reducing faults and improving the customer experience, our engineers have been out there building a faster, more reliable and future-proof broadband network right across the UK.
In just a year, we’ve doubled the size of our full fibre footprint, building more FTTP during 2018/19 than we had in the previous seven years combined.
We’ve made this future-proof broadband technology available to more than 1.2 million homes and businesses nationwide, and we’ve honed our skills, tools and techniques to become not only the fastest, but the most efficient and highest-quality fibre builder in the UK.
All that has put us on the right track to deliver our new target, but we don’t want to stop there.
The Government’s ambition is to see a nationwide full-fibre network by 2033 - but that’s a huge ask.
If it’s going to happen, I know Openreach will need to do the heavy lifting, so we’re working hard to build a business case which makes it commercially viable to upgrade the majority of the UK.
We’re determined to be the UK’s full fibre broadband provider and we’ve been encouraged by the direction of Government and Ofcom in supporting that investment case.
That said, if we’re to build to 15 million premises and beyond, we do still need the certainty of a regulatory framework which encourages investment in the long-term. And we need action to address the ‘Cumulo’ tax on fibre infrastructure, along with a mass of red-tape and barriers which hamper our efforts to upgrade apartment blocks and new developments.
The Government urgently needs to take steps to address these barriers.
I hope some renewed energy can be brought to bear on what’s a crucial national infrastructure project, and one that we believe will create the platform for productivity growth and prosperity post-Brexit.Clive Selley, CEO, Openreach
The declared coverage level of FTTP as of 31st March from Openreach was 1,247,000 premises and even at the 20,000 premises per week pace of the current roll-out they will miss the new 4 million target so we can expect the pace to increase further, a pace of 28,000 premises per week is what is needed.
In addition to the firm target of 4 million in another two years, the previous ambition of 10 million premises for 2025 has been revised upwards to 15 million, suggesting that Openreach believe that they can continue deploying at the higher rate for some years and keeping the costs within a manageable range. The 2025 target is very much dependent on the right regulation and policies from Government and Ofcom.
Looking at the financial results the key figures for Openreach are:
- Revenue down 4% from previous year, reduced revenues from FTTC, Ethernet and WLR being the cause.
- Capital Expenditure running at £2.1 billion up 22.5% compared to the previous year
- Revenue from FTTP doubled from £27m in 2017/18 to £54m in 2018/2019
- Revenue from G.fast at £2m with it recorded as zero the previous year
- Premises passed by Superfast networks 27,479,000
- Premises passed by FTTP network 1,247,000 (for avoidance of doubt premises where Fibre on Demand is available do not count as passed)
- Premises passed by G.fast network 2,020,000 (need to be within the 100 Mbps or faster range to count)
- Premises connected by FTTP 306,000, so take-up of 24.5%
- Premises connected by G.fast 25,000, so take-up of 1.2%
- Premises connected with FTTC 11,891,000 premises
- Premises connected with Ethernet 300,000
The increased FTTP footprint has not been accompanied by any announcement on the 5.7 million premises G.fast target being reduced, so it looks likely this will continue and the degree of overlap with FTTP may increase to ensure that premises such as flats where access for installing FTTP connections is refused that something faster than FTTC is available. The situation with regards to freeholders refusing access to install full fibre is something that is beyond individual infrastructure operators and if the 100% FTTP 2033 Government ambition is a serious target will need addressing possibly with legislation.
The take-up of G.fast at 1.2% looks so low many will wonder why they are bothering especially as to the lay person FTTP looks massively more success with 24.5% take-up. The reality though is more nuanced since some of the FTTP is almost a decade old and in the BDUK areas take-up of FTTP will be high since their other option is usually very slow ADSL. The better comparison is to look at take-up of G.fast compared to FTTP in Fibre First areas and at this time the Fibre First roll-out is too new to give any reliable figures. One key point to consider with regards to take-up is the WLR retirement plans and the proposals to bulk migrate customers onto G.fast or FTTP and flatten the product set on different exchanges over time. Looking at the mass of speed test data we have from the public in areas where G.fast and Openreach FTTP are over the top of VDSL2 already delivering superfast speeds in Q1 2019 just 3 to 4% of the Openreach infrastructure speed tests were above the 76 Mbps VDSL2 maximum speed test.
Earlier this week we promised a bit more information on the breakdown we have for Openreach FTTP and the key figure is that we know of 1,126,716 Openreach premises passed as 9th May, so still behind the official figure but we are finding it at around 3,000 premises a day matching the declared roll-out pace. The G.fast premises passed figure is running at 1,752,681 premises. Using our knowledge of where and when the network was deployed we can provide an estimate for how the coverage is split.
- Openreach Fibre First FTTP premises passed 365,788
- Openreach New Build FTTP (since Jan 2016) 172,408 premises
- Openreach Commercial and other roll-out 157,361 premises
- Openreach BDUK/Rural FTTP 431,159 premises
The BDUK footprint will look high to some, but we are including the large footprints that arose from the Cornwall and Wales projects. The BDUK figure may also include some new build from prior to 2016 but this is believed to only number around 20,000 premises and some installed Fibre on Demand connections where people have self funded will feature but that is probably less than 1,000 premises.
The amount of BDUK FTTP we find is some weeks higher than new VDSL2 areas and more often than not they are pretty equal, confirming the talk of a shift of focus from VDSL2 to FTTP in that area too. The BDUK areas we see each day are a mixture of infill to lift slow VDSL2 areas from sub superfast and some are exchange only lines or cabinet areas that never say VDSL2.
The much longer list is the 1,038,312 premises that form 58 Fibre First exchanges that are on our watch list and the FTTP roll-out for these exchanges gives an overall figure of 34.2% Openreach FTTP coverage. The full list in alphabetical order follows, we have included the Openreach Ultrafast, FTTP and the combined FTTP coverage figures for all operators. The Openreach Ultrafast figure combines the G.fast and FTTP footprint obviously and for G.fast we run a 100 Mbps cut off point.
There are another six exchanges not on this list where we are expecting to start seeing Fibre First activity soon, but it is clear that with a goal of 4 million premises passed in two years time that many more exchanges will appear on this list. In terms of keeping costs under control we should point out that the UK has around 22 million premises classified as urban so plenty more densely packed areas to choose from, but this does mean something of a lottery will exist as planners try to pick areas that will not break the spending constraints.
|Openreach Ultrafast and FTTP coverage at Fibre First exchanges as of 9th May 2019|
|Exchange||Openreach Ultrafast (100 Mbps and faster)||Openreach FTTP||FTTP all operators|
|Cardiff Stadium / Roath||17.7%||0%||9.1%|
There has been some sizeable activity with FTTP with Failsworth being the largest, but this is not a designated Fibre First exchange and there has been glimpses of FTTP activity on other exchanges outside the new build and obvious BDUK areas but in the grand scheme of things the big change in 2019 is the Fibre First activity and the creation of areas of concentrated FTTP availability.