BT Brings Forward Fibre Broadband Rollout End Date

Tom Jowitt is a leading British tech freelance and long standing contributor to TechWeek Europe

BT brings forward the date again

BT’s Infinity fibre rollout to two-thirds of the country has been brought forward and is now expected to be completed during the spring of 2014, more than 18 months ahead of its original schedule.

The company has now twice brought forward the date, indicating its moves to increase its fibre infrastructure workforce are paying off.

BT revealed the change in schedule today as it presented a mixed bag of financial results for its second quarter as the telecoms giant continued to profit from its broadband growth.

But this was tempered by the financial impact from the eurozone crisis and the recent spate of bad weather in the UK.

Rain blame

For the second quarter ending 30 September BT reported an improved net profit of £565m, up from £495m in the same period a year ago. However, revenues dropped nine percent to £4.5bn from £4.9bn.

The company blamed the eurozone recession, regulatory decisions and even the rain for its revenue downturn.

Specifically, the tough trading conditions in the eurozone continued to hit BT’s business. BT Wholesale was also recently hit by a regulatory decision concerning wholesale ladder termination pricing that the carrier said it would be appealing.

As for the impact of inclement weather, the carrier had to divert more of its energy and resources to repairs because of the huge quantity of rainfall during this past summer. Repairs were prioritised over new installations.

“We have delivered another solid quarter of growth in profit before tax despite the economic conditions and regulatory impacts,” said chief executive Ian Livingston. “We continue to make significant investments in the future of our business and we are again accelerating our fibre roll-out. We now expect fibre to be available to two-thirds of UK premises during spring 2014, more than 18 months ahead of our original schedule, and we are recruiting more than 1,000 engineers in 2012 to help deliver this.”

Divisional performance

Elsewhere, BT Global Services saw revenues fall 13 percent to £1.7bn from £2bn in the year-ago quarter. This was blamed on the tough conditions in Europe and a dip in spending in the financial services sector.

BT Retail, the unit most consumers will encounter, posted a three percent revenue decline to £1.8bn from £1.9bn previously. The carrier blamed a decrease in revenues from voice calls and line rentals, but this was partially offset by growth in broadband, thanks to its fibre push.

BT Wholesale, the division that provides all the backhaul connectivity, saw revenue fall 12 percent to £861m from £982m. Part of the blame was assigned to the ongoing migration of broadband lines to LLU (local loop unbundling) and the recent regulatory decision.

BT Openreach saw a modest one percent fall in revenue to £1.27bn from £1.28bn a year ago. The rain repair bill plus regulatory price reductions, were offset by growth in Ethernet and fibre.

Fibre broadband position

Aside from the mixed performance of BT’s various divisions, the most interest of course centres over BT’s broadband position, as some feel that BT unfairly dominates the entire superfast broadband market, including TalkTalk CEO Dido Harding.

Liv Garfield, CEO of Openreach, told TechWeekEurope that TalkTalk’s CEO had been pointing out that regulation should now be considered. Garfield categorically denied BT operates a fibre monopoly in the UK.

“Our customers are nagging us every day for fibre,” she said on a conference call. “We have committed to a 66 percent fibre rollout in the UK, and for the final third we will work in partnership with others or via the BDUK scheme.”

“I find it fantastic that BT could be accused on being a monopoly when Virgin Media also covers 40 percent of most profitable parts of the UK with its own fibre network, and that network is not open to anyone else.

“We have opened our network to others and provide an equal access network to other service providers.”

On the BDUK front, which many feel is a one horse race, Garfield pointed out that BT didn’t win tenders in York and in North Wales. “We don’t believe we will win all bids,” she said. BT and Fujitsu are the only two approved suppliers on the central government-approved framework.

Garfield said that she expects a EU decision on whether the BDUK funding amounts to “state-aid” to BT, would be resolved by late November.

BT said its one millionth fibre customer will be connected in next few weeks, and it has now passed more than 12m premises with its fibre broadband.

BT continued to shore up its top spot as a broadband ISP, after adding 81,000 retail broadband customers in the quarter, representing 47 percent of the broadband market net additions of 174,000. It also said it had added around 160,000 retail fibre broadband customers and the retail fibre customer base is now more than 875,000.

Power connections

Garfield also admitted to TechWeekEurope that the rollout of fibre in the UK was occasionally being hampered by other utility companies. She pointed out that UK Power Networks controls all of the power sources, and that BT has sometimes been confronted by excessively high bills to power a fibre cabinet.

“We have had a fair number of cabinets where this has happened,” said Garfield, saying that BT has rolled out fibre to a cabinet only to be presented with a large invoice from UK Power Networks.

“We have had tens of cabinets like that, and unfortunately, it then makes a fibre deployment to that cabinet non-commercially viable,” she said.

Update: BT doesn’t have to use UK Power Networks, if their prices are too high, according to a statement the organisation sent to TechWeekEurope. 

“UK Power Networks is not the only company which can provide the services required to power BT’s broadband cabinets,” says the statement (pasted below in full), which explains that civil works are open to competition, and Ofgem has recently approved the use of “any suitably accredited independent connection providers” to connect services to the live mains.

“Each connection is priced on its own merits and the wide variation in prices are due to factors beyond our control, such as the distance of the kiosk from the nearest electricity main, the need to extend the electricity network and costs that we incur and have to pass on, such as traffic management, road closures, parking bay suspension and lane rental etc,”  the statement concludes.

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