BT to ramp up rural fibre rollout
Phillip Jansen, CEO of BT Group, announces ramping up of the Openreach investment programme to bring Gigabit Fibre-to-the-Premises (FTTP) broadband to rural areas by the mid to late 2020s. Some 27 new rural areas are expected to benefit from the £12bn investment programme, which now targets 25 million homes.
Currently, the Openreach network reaches 4.5 million homes and businesses across the UK. That figure is expected to rise to 5.8 million premises by September 2021. Out of that additional 25 million homes, 3.2 million will be located in rural or semi-rural areas. This is a commercial build with no state aid and is expected to be completed by 2025/6.
Openreach has a current build rate of 42,000 per week with new orders averaging 17,000 per week from ISPs, including EE, BT, Talk Talk and Sky Broadband. That strong uptake is driving the ramping up of the existing rollout programme.
In its recent market review, Ofcom made a series of favourable regulatory decisions designed to assist the further expansion of the UK's full fibre network. Although the new geographic-based approach will allow for the introduction of a dark fibre product, where alt ISPs can install their own equipment within reach of Openreach ducts, the move away from cost-based charge controls on existing copper broadband work in their favour. And Ofcom retains the approach that Openreach be allowed to make a 'fair return'.
Coupled with the 2021 Budget's announcement of a 'super deduction' policy for businesses that invest in new machinery and plant, and the deployment of next generation faster trenching machines, Openreach is in a strong position to expand. In fact, it has already increased its targets from 20 million to 25 million homes thanks to the security and confidence in its position. That figure represents 80% of British homes and businesses.
Openreach will now ramp up its operations, aiming to hit four million premises this year, a one million increase on the expected peak. The entire operation will be funded from BT's internal resources, while it maintains investment in its 5G and modernisation programmes. It is also committed to a BBB flat credit rating, reinstating its dividend and supporting the BT pension fund.
Altnet providers will be a little alarmed at Openreach pushing into areas where it is currently investing and that BT has previously ignored. But according to Jansen, BT has provided more full fibre to homes and businesses than any other provider in the UK, and its increased targets will support government full fibre ambitions and add value for shareholders, plus deliver better connectivity across the UK.
BT Group's CEO added that this would have three main benefits, allowing them to go faster, beef up the capacity to build fibre to homes and businesses and get fibre to rural and semi-rural communities. Jonson said it would also help to fuel the UK's economic recovery and add 7,000 new jobs.
With 27 new locations potentially benefiting from enhanced connectivity and gigabit full fibre broadband, and take-up at 19.6% (up from 19.51% last quarter), the future looks fast and connected.