BT Group today confirmed its plan to build fiber-to-the-premises (FTTP) through Openreach to 20 million homes and businesses across the UK by the mid- to late-2020s, through a £12bn ($16.7bn USD) investment program. Indeed, BT Group’s announcement for Openreach comes on the back of Ofcom, the UK’s communications regulator, today publishing its statement on the Wholesale Fixed Telecoms Market Review (WFTMR). Specifically, the WFTMR sets out how Ofcom will regulate telecom fixed access services, including fiber broadband, over the next 5 years, to 2026.

Currently, BT Group, through its division Openreach, passes almost 4.5 million premises with fiber broadband services. Therefore, BT Group’s 20 million fiber passings goal means that Openreach will pass an incremental 15.5 million homes and businesses. Notably, this is an increase of over 4 times the company’s current fiber infrastructure deployment levels.

BT Group Openreach Fiber-to-the-Premises (FTTP) Passings

BT Group Openreach Premises with FTTP Fiber

A major focus from Ofcom has been to stimulate next generation fiber-to-the-premises (FTTP) broadband investment across the UK. Indeed, the WFTMR provides clarity to telecom operators by defining the parameters of broadband regulation. In turn, BT Group is ramping-up its fiber deployment to 3 million premises per year. Therefore, greater penetration of fiber connectivity will result for homes and businesses across the UK, replacing legacy copper infrastructure.

Fiber-to-the-Premises (FTTP) – BT Group Rationale

BT Group’s rationale to advance its fiber-to-the-premises (FTTP) build-out across the UK is in-part a financial goal. Importantly, BT Group has stated that it has an “average build cost across the entire footprint of between £300 and £400” for each home or business it passes. Additionally, in February 2021, BT Group discussed its expected financial returns on its trading update call. Specifically, the company notes its “return is around 10% to 12%” on capital invested in its full fiber build plan.

Overall, with logical financial metrics from Ofcom and WFTMR, BT Group can pursue growth of Openreach’s 790k fiber-to-the-premises (FTTP) customers. Currently, Openreach’s penetration rate represents 18% of the 4.5 million premises passed with fiber broadband. Therefore, the incremental 15.5 million homes and businesses that BT Group intends to pass with fiber, represents a potential 2.7 million customer opportunity, assuming similar penetration levels.

UK Competitors – Fiber-to-the-Premises (FTTP)

Today’s announcement from Ofcom on the Wholesale Fixed Telecoms Market Review (WFTMR) does not solely benefit BT Group through Openreach. Indeed, a number of companies in the UK are seeking to capitalize on the country’s need for more fiber infrastructure. Albeit at a smaller scale, these competitors include Virgin Media, Hyperoptic, CityFibre, Gigaclear, and KCOM.

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group, Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), Lumen Technologies (NYSE: LUMN), Frontier Communications (NASDAQ: FYBR), Consolidated Communications (NASDAQ: CNSL), and many more. Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), fiber-to-the-premises (FTTP), and subsea cables. Jonathan has over 8 years of experience in research and writing for Fiber.


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