TIDMBT.A
RNS Number : 5593D
BT Group PLC
01 February 2018
1(st) February 2018
Openreach launches 'Fibre First' programme to make Fibre to the
Premises broadband available to three million UK homes and
businesses by the end of 2020
-- First eight cities named as build accelerates from 2018 to cover urban and rural communities
-- Sets course to reach 10m homes and businesses by mid-2020s with the right conditions
-- Plans to recruit and train 3,000 field engineers in 2018
Openreach, Britain's national broadband infrastructure provider,
today announced an acceleration of its Fibre to the Premises (FTTP)
build programme to enhance Britain's digital infrastructure and to
reinforce the UK's position as the leading digital economy in the
G20. (1)
Openreach is extending its current Fibre to the Premises (FTTP)
build target by 50% to reach three million premises by the end of
2020 through its new 'Fibre First' programme(2) . Birmingham,
Bristol, Cardiff, Edinburgh, Leeds, Liverpool, London and
Manchester make up the first phase of the programme which will
connect up to 40 UK towns, cities and boroughs with FTTP(3) with
build starting in 2018. Openreach will also continue to focus on
delivering FTTP to rural areas, in partnership with the Government,
to make sure some of the hardest to reach communities in the UK get
access to future-proofed, FTTP networks.
Fibre First reconfirms Openreach's ambition to build a
large-scale FTTP network in the UK and accelerates the next
fundamental upgrade of critical UK infrastructure. With the largest
FTTP footprint in the UK(4) , Openreach is best placed to deliver
the infrastructure required, at scale, to maintain the UK's
position as a leading digital economy. An FTTP network has
substantial and far-reaching benefits for UK citizens, businesses,
society and the economy. The benefits include: better, more
reliable service; fewer faults; and faster, more predictable and
consistent speeds. The platform would be future-proof, supporting
the speed requirements of customers for decades to come.
The pace and extent of this large-scale investment will depend
on the speed with which the conditions to enable an acceptable
return on the investment are secured. Support is needed from
Communication Providers (CPs), central and local Government and the
regulator to deliver key enablers, including: achieving low build
and connection costs; achieving rapid take-up of and generating
incremental revenue from the platform; and having a supportive
regulatory and public policy framework. As with any infrastructure
investment, if Openreach is unable to secure an acceptable return,
it will need to review its ongoing capital commitments to the
programme.
Reaching three million premises by 2020 sets Openreach on the
right trajectory to achieve its ambition of building a ten million
FTTP footprint by the mid-2020s and, if the conditions are right,
to go significantly beyond, bringing the benefits of FTTP to the
majority of homes and businesses across the UK.
(1) Defined as a proportion of GDP - according to Boston
Consulting Group research.
(2) The Fibre First programme will see Openreach build FTTP to a
further c.800,000 premises in BDUK areas and new housing sites, and
to c.1.7 million premises in towns and cities.
(3) FTTP connections can deliver ultrafast speeds up to
1Gbps
(4) Openreach has already provided 500,000 residential premises
in Britain with access to FTTP, the majority of which are rural
areas.
Clive Selley, Chief Executive of Openreach, said: "Through the
Fibre First programme, Openreach is getting on with the job of
building an Ultrafast Britain. We are accelerating our plans to
build FTTP to three million premises by 2020 which sets the course
to reach ten million by the mid-2020s with the right conditions.
Where possible going forward, we will 'fibre first'.
"Working closely with Central and Local government and our
Communication Provider customers, we will identify the cities,
towns and rural areas where we can build a future-proofed, FTTP
network that's capable of delivering gigabit speeds to all homes
and businesses at an affordable cost.
"We'll continue to invest in our people and we're already in the
process of re-training and upskilling to make Fibre First a
reality. We plan to hire around 3,000 engineers in 2018/19 to
kick-start Fibre First and further improve the reliability and
performance of our existing networks."
Gfast* remains a critical component of Openreach's ultrafast
strategy and an important platform that will be deployed at scale
in the UK to millions of premises. Gfast allows Openreach to
deliver ultrafast speeds over existing copper lines. It builds on
existing Openreach networks, so it is quick to deploy with minimal
disruption and at relatively low cost. Openreach remains committed
to rolling out Gfast at speed. Openreach will employ a Fibre First
ethos and will not build Gfast and FTTP to the same locations.
An initial consultation by Openreach, which was open to all CPs
and concluded in autumn 2017, found there was broad support for
Openreach to start building a large-scale FTTP network in the UK.
The consultation also helped Openreach to identify a set of
enablers needed to underpin a viable commercial business case. The
enablers remain important for the first wave of FTTP investment to
be successful, and critical for Openreach to sustain a high rate of
build into the mid-2020s and reach its ambition of ten million
premises.
Enablers
1. Build and connection costs
The cost of building FTTP varies significantly depending on the
exact location. Openreach expects the cost of building FTTP in
towns and cities over the next three years to be around
GBP300-GBP400 per premise passed. If the costs of battery back-up
are excluded for the majority of customers, we expect connection
costs to be around GBP150-GBP175.
2. Take-up and Revenue
The consultation identified three sources of value: lower
Openreach operating costs enabled by the new platform; incremental
revenue per line from Openreach's wholesale charges to CPs; and the
benefit to Openreach from a more competitive network. Our further
analysis continues to indicate that all three sources of value will
be needed to secure acceptable returns.
To maximise the potential of a large-scale new FTTP deployment,
Openreach believes it is essential to move all customers onto the
new network quickly once built. In the first instance Openreach
believes mass market adoption at competitive prices(5) can be
pursued through commercial agreements with CPs, and will explore
models to achieve this in parallel with accelerating its FTTP
build. Ultimately a 'switchover' process will be required, moving
all customers onto the FTTP network so that everyone benefits.
Openreach will consult with CPs and other stakeholders on how this
can be achieved in due course.
3. A supportive regulatory and public policy framework
To maintain momentum on building more FTTP into the 2020s, a
supportive regulatory and public policy framework is essential.
Openreach is encouraged by its initial engagement with both Ofcom
and Government, and looks forward to continuing to work with both
to secure the right conditions for sustained commercial investment.
Key requirements include:
i. the extension of Cumulo rates** relief to better reflect the
long-term nature of FTTP infrastructure investment timescales;
ii. certainty around the fair bet framework to ensure that
initial and subsequent rounds of investment have the opportunity to
earn returns that fully reflect the risk taken at the time of
investment, and where competition is effective, greater commercial
freedom;
iii. support for and help with a switchover process when this
ultimately becomes required to maximise the benefits of the
platform;
iv. close partnerships with local authorities to reduce red tape
and provide a smooth path to delivery. Openreach has already
piloted a co-located Fibre First team with the City of London
Corporation and will now replicate this model with other local
authorities as part of the Fibre First project.
S
Notes to editors
For further information
Enquiries about this story can be made to the Openreach PR team
on: 020 7809 7950 or email press@openreach.co.uk.
All news releases can be accessed on our web site.
*Developed at BT's world-leading research and development
facility at Adastral Park, Suffolk, Gfast technology changes the
way today's broadband is transmitted. It allows ultrafast speeds,
which previously required fibre optic cables to be run all the way
to a property (FTTP), to be transmitted over existing copper lines
and fibre broadband cabinets. This is significant as Gfast will
enable Openreach to make ultrafast fibre available more quickly to
a much larger number of homes and businesses than if it focused on
FTTP alone.
** "Cumulo rates" is the phrase used to describe a tax on
commercial property. The "commercial property" taxed in this way is
defined by the Valuation Office Agency ("VOA") as BT"s network
(ducts, poles, parts of exchange buildings and other assets).
(5) Current connection charges for ultrafast FTTP 160Mbps range
from GBP92 to GBP117. Openreach's current ultrafast FTTP pricing
ranges from GBP19.78 to GBP21.39 for 160Mbps with connection fees
for GBP92
About Openreach
Openreach is Britain's digital network business.
We're 30,400 people who connect homes, mobile phone masts,
schools, shops, banks, hospitals, libraries, broadcasters,
governments and businesses - large and small - to the world.
Our mission is to build the best possible network, with the
highest quality service, making sure that everyone in Britain can
be connected.
We work on behalf of more than 590 communications providers like
SKY, TalkTalk, Vodafone, and BT, and our fibre broadband network is
the biggest in the UK, passing more 27 million premises. We're also
the platform for Britain's thriving digital economy, which is the
largest in the G20.
We're working hard to give people the speeds they need to run
and enjoy their daily lives. Over the last decade, we've invested
more than GBP11 billion into our network and we now manage more
than 160 million kilometres of cable stretching from Scotland to
Cornwall, from Wales to the east coast. And we're continuing to
take that network further - making superfast broadband speeds
available to thousands more homes and businesses every week.
Openreach is a wholly owned and independently governed division
of the BT Group, and it is a highly regulated business, with more
than 90 per cent of our revenues generated from services that are
regulated by Ofcom.
Any company can access our products under exactly the same
prices, terms and conditions.
For the year ended 31 March 2017, we reported revenues of
GBP5.1bn.
For more information, visit openreach.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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