BT Group today announced its plan to build fiber-to-the-premises (FTTP), through Openreach, to 25 million homes and businesses across the UK by December 2026. Indeed, the company’s plan represents a 25% increase from Openreach’s prior target, in March 2021, of 20 million homes and businesses across the UK by the mid- to late-2020s.

Over the past 12 months, Openreach passed 2 million premises with fiber. However, BT Group’s Openreach now anticipates ramping-up its fiber deployment to a peak build of 4 million premises per year. In turn, more homes and businesses across the UK will have access to fiber connectivity, instead of legacy copper infrastructure.

BT Group – Openreach – Overview

Currently, BT Group, through its Openreach division, passes 4.6 million premises with fiber broadband services. Additionally, the company has 905k fiber-to-the-premises (FTTP) customers, equating to a fiber penetration rate of 19.6%. Of these, 905k fiber-to-the-premises (FTTP) customers, 753k (83%) are consumer subscribers.

BT Group – Openreach – Fiber-to-the-Premises (FTTP) Passed

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

Overall, BT Group’s 25 million fiber passings goal means that Openreach will pass an incremental 20.4 million homes and businesses. Notably, this is an increase to over 5 times the company’s current fiber infrastructure deployment levels.

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

BT Group attributes its increased build confidence to a number of factors. Firstly, Openreach has had strong take-up on its current fiber-to-the-premises (FTTP) footprint, by 381k customers year-over-year. Secondly, Ofcom, the UK’s communications regulator, has provided regulatory clarity through its Wholesale Fixed Telecoms Market Review (WFTMR).

Thirdly, the UK Government’s recent cash tax super-deduction improves the economics of fiber deployments. Finally, the recent UK 5G spectrum auction in the 700 MHz and 3.6 GHz to 3.8 GHz frequency ranges resulted in a materially lower cost than anticipated.

Joint Venture – BT Group and Third-Party

BT Group notes that it could fund the incremental 5 million fiber-to-the-premises (FTTP) build through a joint venture structure with external parties. Moreover, the company states that it will actively explore joint venture structures over the next 6 months.

In terms of structure, BT Group states that the recent KPN and APG fiber joint venture represents a good “proxy” or “strawman” for the joint venture that it is pursuing. Indeed, this fiber joint venture trend has been showcased by other recent announcements in Belgium, the Netherlands, and Poland.

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