BT & Openreach make broadband and 4G gains despite accounting issues and Ofcom regulatory pressure
BT is investigating the possibility of a ‘large scale’ fibre to the premise (FTTP) rollout across the UK as the number of premises covered by the Openreach superfast broadband network reached 26.5 million during the most recent quarter.
More than half of BT’s 9.3 million broadband customers are on fibre, while there are 20.4 million connections from all providers on the Openreach network. In total, Openreach has 7.7 million superfast connections – 29 percent of all premises passed.
More than 500,000 premises are now covered by Openreach’s ‘ultrafast’ network, which comprises both FTTP and G.Fast – a technology which speeds up copper cables.
BT plans to deliver ultrafast to the majority of the UK within a decade, mainly through G.Fast, but says it is now undertaking a cost-benefit analysis for a wider FTTP deployment.
Competitors and politicians have continually criticised the decision by BT to deploy FTTP and G.Fast claiming it was ‘sweating’ its copper assets, but now a future direction for Openreach has been agreed, a strategy change could be in the pipeline.
On the mobile side of things, BT now has 16.9 million 4G customers via the EE network and population coverage is now 99 percent – more than any other UK mobile operator.
EE’s big drive at present however is towards 92 percent geographic coverage by the end of 2017 and 95 percent by the end of 2020. The current figure is 80 percent after BT switched on long range 800MHz spectrum at 700 sites, improving indoor signal quality and extending coverage in rural areas.
Overall BT reported a £6.1 billion in quarterly revenues, up 10 percent, and £24 billion for the year, a rise of 24 percent. Pre-tax profits were £440 million for the quarter, down by 48 percent, and £2.4 billion, down 19 percent, over the past 12 months.
Accounting scandals at BT Global Service’s (BTGS) Italian unit, a significant fine from Ofcom over Ethernet provision, and ongoing regulatory pressures affected the company’s financials, but CEO Gavin Patterson painted a rosier picture with ongoing investments and a restructure at BTGS.
“We take these issues extremely seriously and are putting in place new measures, controls and people to prevent them happening again,” he said. “Learning from the challenges of this year will make BT a stronger company for the future.
“However, we’ve also made good progress in a number of areas. Our integration of EE is going well, our UK consumer, SME and corporate businesses are performing strongly, and we’ve made significant progress in improving customer experience across the group. Our agreement with Ofcom on Openreach governance brings to an end a period of uncertainty.
“We’ve undertaken a strategic review of Global Services. Technology trends mean that we are now less dependent on owning physical local network assets around the world, creating the opportunity to reposition Global Services as a more focused digital business. We are therefore restructuring our Global Services organisation to enable this strategic refocusing.”
Industry observers said that beyond the headline problems, the strong performance of its consumer and mobile divisions and greater clarity about the future of Openreach, mean there are positives to take forward.
“Overall, it has been a tough year for BT,” commented Paolo Pescatore, an analyst at CCS Insight. “The Italian scandal coupled with the Ofcom have hit the company quite hard. Furthermore it has had to deal with a barrage of pressure from rivals for an independent Openreach.
“Finally, a deal with Ofcom regarding Openreach has been agreed it now has some regulatory certainty to continue investing for the future. And it now has a significant mobile business with EE which it can leverage without having to depend on other areas.”