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BT touts £6B ultrafast broadband investment

BT Group has outlined plans to invest billions on faster fixed and mobile broadband. Its Openreach and EE businesses will between them spend around £6 billion in capital expenditure over the next three years.

The plans include a renewed focus on fibre-to-the-premises (FTTP), with the aim to reach two million premises with the technology, mainly in new housing developments, high streets and business parks.

The news follows further trials by BT’s infrastructure business, Openreach, to demonstrate that it can reduce the cost of fibre deployment, improve the customer experience and make FTTP quicker to install. The trials are going well, according to BT.

Openreach also announced that it would deploy FTTP for free at sites where there are more than 100 homes. The network operator speculates that fibre connections may also play a role in serving apartment blocks as well as some rural areas.

However, most customers can expect to receive ultrafast broadband using technology, which will be deployed to a minimum of ten million properties in the same period, subject to regulatory support, with an ambition to reach twelve million (see BT puts at heart of its broadband strategy).

BT Group chief executive Gavin Patterson said: “The UK is a digital leader today and it is vital that it remains one in the future. That is why we are announcing a further six billion pounds of investment in our UK networks, subject to regulatory certainty.

He continued: “Networks require money and a lot of it. Virgin and BT have both pledged to invest and we will now see if others follow our lead. Infrastructure competition is good for the UK and so is the current Openreach model whereby others can piggyback on our investment should they want to.

“FTTP will also play a bigger role going forward and I believe it is particularly well suited to those businesses who may need speeds of up to 1Gbps. My ambition is to roll it out to two million premises and our trials give me confidence we will.”

BT notes that the UK is the leading digital economy in the G20 by percentage of gross domestic product (GDP) with the highest superfast broadband coverage and take up in the EU ‘big five’: the UK, Germany, France, Spain and Italy.

More than 90 per cent of UK homes and businesses can currently access superfast broadband – meaning headline speeds greater than 24Mb/s in this context – across all fixed networks, and that is set to rise to 95 per cent by the end of 2017. BT says this next wave of investment will help Openreach take UK superfast broadband coverage beyond 95 per cent.

However, while it may compare favourably to the major European economies in terms of mid-speed broadband deployment, the UK lags behind them in deployment of new fibre infrastructure. France and Spain, for example, already have millions of FTTP subscribers while the UK has just a few tens of thousands (see FTTH subscribers in Europe reach 36 million).

Ronan Kelly, president of the FTTH Council Europe and CTO for the EMEA and APAC regions at Adtran lauded the renewed emphasis on FTTP. “It is no secret that the UK and other European countries have had to play catch up, and BT's investment plan will accelerate the process. Leveraging existing network assets, BT’s approach will see the UK leapfrog many of its European peers as they wrestle with infrastructure replacement,” he said.

Nevertheless, BT is often criticised for continued reliance on copper extension technologies such as VDSL and to achieve its objectives – and the latest announcement was no exception. The majority of customers will receive broadband through, a technology that mixes copper and fibre.

BT also said that it “stands ready to address slow speeds in the final few per cent of the country” but only “should there be regulatory support for its plans”. The operator has been developing ‘Long Reach VDSL’ in its laboratory at Martlesham Health, which could be a potential solution for those areas, and Openreach is set to run technical trials in the coming months.

Greg Mesch, CEO at alternative operator CityFibre commented: “This announcement is simply a reluctant response by a sluggish incumbent to the tightening noose of regulatory scrutiny. While intended to grab headlines on infrastructure commitment, BT's announcement is largely signposting continued deployment of outmoded technology.”

There’s no doubt that the threat of tighter regulation – possibly even the forced separation of Openreach – is on BT’s mind. The former incumbent promised to increase investment in infrastructure following the regulator’s strategic review of the UK communications market earlier this year (see BT avoids breakup following Ofcom digital review).

Meanwhile, EE has said that it will extend its geographic 4G footprint from around 60 per cent today to 95 per cent by 2020. These parallel plans will ensure the UK is one of the best served countries in the world when it comes to superfast fixed and mobile services.

Also part of the announcement, BT Group has unveiled a range of new initiatives to improve customer services, with BT Consumer set to reduce the standard time to fix line faults by 24 hours as well as pledging to handle 90 per cent of its customers’ calls in the UK by March 2017. These new commitments follow the recent announcement that EE will handle 100 per cent of its customers’ calls in the UK by the end of this year.

Openreach also gave new service commitments with CEO Clive Selley telling his communication provider customers it will deliver ‘better service, broader coverage and faster speeds’. The business will hire 1,000 new engineers this year and provide further multi-skill training for engineers so there is more flexibility in the work they can do.


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