Openreach doubles down on full-fibre broadband roll-out

In its first ever annual review as a legally independent body, national network builder Openreach has recommitted to its full-fibre – or fibre to the premises (FTTP) – targets, saying it will go above and beyond in the next 12 months to help achieve its ambition to have 10 million homes and businesses connected to full-fibre broadband by 2025.

“Having achieved such widespread access to superfast broadband, it’s right that we shift our focus to the next generation of ultrafast (100+ Mbps) infrastructure,” wrote Openreach chair Mike McTighe.

“We believe in a full-fibre future. In fact, I think a future-proofed digital network is essential to the UK’s productivity and prosperity – it will serve Britain’s people and businesses for decades to come. So we need to develop a viable business case which makes that possible.”

CEO Clive Selley fired the starting gun on Openreach’s plans for mass full-fibre nearly six months ago, announcing an FTTP service roll-out in eight cities – since extended to nine. At this point, it claims to be passing 8,000 properties a week.

In the next 12 months, Selley said, Openreach now plans to double its full-fibre footprint, and the organisation reiterated calls for help from government, local authorities, communication service provider customers and Ofcom to help derisk the investment process, going further to remove the barriers and red tape that can hinder broadband network investment.

Selley also committed to further rolling out its Gfast copper-based ultrafast broadband services deeper into areas that Openreach is not currently targeting for full-fibre roll-out, and to doing more to encourage the many millions of households that have not yet upgraded to superfast services to do so, and in particular to upgrade to ultrafast full-fibre once it becomes available.

“Mass market is critical to making a national full-fibre business case work, so we’ll also be exploring ways to reach commercial agreements with communications providers to achieve this,” said Openreach in its review document.

From a financial perspective, Openreach said that despite booking approximately £230m of regulatory price changes, its overall revenues for the 12 month period to 31 March 2018 (Openreach’s fiscal year runs concurrently with BT’s) remained flat at £5.12bn thanks to strong demand for fibre products.

Operating costs went up 1% reflecting investment in delivering minimum service levels, reducing the number of appointments missed by engineers, and upskilling its workforce.

Operating profit was down 7%, while capital expenditure rose 9% to £1.58bn, reflecting more investment in fibre networks.

Openreach also booked gross grant income of £159m related to ongoing activity around the Broadband Delivery UK (BDUK) programme build, and offset by the deferral of £185m of total grant income due to strong levels of service take-up.