BT Group announces £12 billion to increase FTTP footprint to 20 million premises
The BT Group results will be covered in two articles today, the news around expansion of the FTTP roll-out is the focus of this news item and a second item later will cover the more normal stuff.
We have the largest and most extensive fixed network and are leading the UK on the next generation Fibre-to-the-Premises (FTTP) network where we now pass 2.6 million premises. Today we are announcing a rapid acceleration of our FTTP build with a target of 20 million premises passed by the mid- to late-2020s, including a significant build in rural areas. After passing 1.3 million premises last year, we are aiming at over 2 million in 2020/21, and envisage a maximum build rate of 3 million premises per year. Our FTTP investment should deliver pre-tax nominal returns of between 10% to 12% and is based on a regulatory framework consistent with Ofcom’s preferred policy direction and continued support for infrastructure investment and competition.Philip Jansen, BT Group Chief Executive
The FTTP roll-out comprises of two targets:
- The existing aim for 4 million FTTP premises passed by 31st March 2021 has been upgraded to a target of 4.5 million premises passed.
- The old talk of 15 million premises passed by mid 2020s is now upgraded to be 20 million premises by the mid to late 2020s and an investment amount of around £12 billion is stated. Previous 15 million talk did not come with any financial figures.
Clearly to hit the milestones on the path to 4.5 million premises and the subsequent 20 million the build rate of the last year is going to have to increase.
The declared number of premises passed is 2,575,000 as of 31st March 2020 and a year ago they had announced hitting the 1.2 million premises mark.
Passing premises is the first part of the story the next step is people signing up and paying and getting them connected and the latest KPI fgures show Openreach has connected 524,000 premises up from 465,000 in the last quarter.
So has BT and Openreach delivered 2,575,000 premises passed? It is normal to see lots of people commentating that they think it is all smoke and mirrors as they've seen no change in their area or just G.fast pods have appeared, but given 2.6 million is still under 10% of UK premises it is obvious lots of people will have seen nothing happen yet.
Our tracking has seen the Openreach footprint grow from 1,003,094 premises on April 9th 2019 to 2,251,1780 as of the morning of 7th May. So it does like what they say is happening is actually happening and given we are 300,000 premises behind then we expect to see the amount we find increasing in the coming weeks and months. Our regular dive into where Openreach is deploying FTTP on the 12th of each month has some interesting changes that you will find out about on the 12th May.
Is Openreach on track for its 31st March target? Well if you assume the same build rate as the last 12 months then they were going to be shy of 4 million by around 300,000 and the new target by 800,000. So clearly they are looking at a higher build rate and the impact from COVID-19 while effectively halting FTTP installs into homes has not stopped they carrying out streetworks.