BT Group results for April to June 2020 published
In normal times a 7% drop in revenue would be the headline, but seeing the wider impact of COVID-19 on the economy and the state of many other firms this is not too bad at all. With the push towards full fibre and millions more working from home those selling broadband connectivity should be in a good position so long as any full lockdowns that delay installs can be avoided.
The full BT Group results are on the BT site of course, and our summary of the key figures from the previous quarters results is back in our archive. As usual we leave the pennies and pounds to the financial geeks and will concentrate on the broadband aspects of the latest results.
- FTTP footprint risen from 2.575m to 2.979m in the quarter
- 554,000 properties connected with FTTP, i.e. take-up rate of 18.6%.
- G.fast footprint with a very small increase from 2.814m to 2.831m
- 98,000 properties connected with a take-up rate of 3.5%
- 14,448m FTTC connections, only 269,000 are using the SoGEA option yet. SoGEA being FTTC without any copper voice service
- 435,000 FTTC connections added in the quarter
The FTTP take-up rate has dropped from 20.3%, but there are two clear reasons for this: the lockdown that put a hold on installs in homes (apart from a small number for keyworkers) in April and May 2020, the second is the build rate has increased and there will be a lag between the network being built and the public buying the service. There may also be some extra delay for those whose job is on shaky ground due to the pandemic and thus wanting to avoid 18 or 24 months and the financial commitment that entails. Public service announcement time: If FTTP arrives you are not obliged to buy the 300, 500 or 900 Mbps options, the majority of sellers will have an entry level service that costs around the same price as FTTC services but you gain from improved reliability and no DSL speed versus distance loss.
Apparently once orders started to be taken again there was 10,000 FTTP orders in 1 week in June, so expect to see the take-up rate bounce back next quarter.
In the take-up race and revenue stakes new build homes look to be the most lucrative based on the product split we are seeing from speed tests in the last quarter.
- In New Build postcodes (i.e. 2016 and later) 31% of tests over the Openreach network were over 76 Mbps
- In Fibre First areas only 5% of tests are over 76 Mbps
- In BDUK/gap funded/rural areas 17% of tests are over 76 Mbps
- In Commerical FTTP areas (which includes the Fibre Village areas, but that will get its only figure next quarter) 18% of tests were over 76 Mbps
- In areas with no Openreach FTTP, 25% of Openreach tests were greater than 40 Mbps and 13% over 52 Mbps.
Given that Fibre First areas are also the areas with the most competition from Virgin Media and others such as CityFibre a lower take-up is to be expected. Also Fibre First areas invariably are dense urban areas where decent VDSL2 speeds well above the 30 Mbps are very common.
This split is set to change quickly though, as the plan is to stop selling copper based services in 117 exchange areas covering some 1.2 million premises from June 2021. Plus with TalkTalk selling FTTP in a limited way there will be more big name options for FTTP with pricing slightly below that of BT Consumer.
The conversion of the customer base onto a partial or full fibre service continues, in the quarter 81.8% were on a superfast product and 2.5% on an ultrafast product, a year ago these two figures were 74.3% and 1.3%. So the decline of ADSL/ADSL2+ continues. We believe that the superfast figure equates to what we would call partial fibre i.e. FTTC/VDSL2 services irrespective of the sync speed of the line, using the same logic the ultrafast refers to G.fast and FTTP but we cannot be sure.
Product popularity based on thinkbroadband speed test observations in order of decreasing popularity:
- BT Superfast 1 FTTC/VDSL2 40/10 and 55/10 43.5% of tests
- BT Superfast 2 FTTC/VDSL2 80/20 27.9% of tests
- BT ADSL/ADSL2+ 23.3% of tests
- BT Superfast 1 FTTP 40/10 and 55/10 2.9% of tests
- BT Ultrafast 2 FTTP 145 Mbps 2.7% of tests
- BT Superfast 2 FTTP 80/20 2.5% of tests
- BT Ultrafast 2 FTTP 330 Mbps 2% of tests
- BT Ultrafast 1 & 2 G.fast 0.9% of tests
- BT 500 FTTP 0.7% of tests
- BT 900 FTTP 0.4% of tests
There quarter saw small changes for the various tiers generally +/- 0.2 so given the crowd sourced nature of the speed tests the results are very consistent. The rise for the BT 500 and BT 900 products at 0.4 and 0.2 respectively may or may not be signficant, the BT 500 service has vanished from online sale with Ultrafast 2 and the 900 Mbps tiers being the sales focus now.