Noting that high-quality connectivity has never been more important for its customers and that it remains “laser-focused” on modernising and simplifying the company, BT Group has released results for the first six months of its 2023 financial year. The numbers show that, despite marked growth in the deployment of fibre networks across the UK, revenues have only inched up compared with the same time a year ago.
In all, the company reported revenue of £10.4bn at the end of the half year to 30 September 2022, rising by just 1% on an annual basis. The key drivers were growth in BT’s consumer business and Openreach broadband provision division. Revenue growth was partially offset by legacy declines in large corporate customers in the enterprise business, lower equipment sales in the global business and the impact of the disposal of the BT Sport business line.
Revenue growth in addition to increased cost control and one-off items saw adjusted EBITDA of £3.9bn, up by 3% annually, while reported profit before tax was £800,000, down by 18% due to higher specific costs offsetting adjusted EBITDA growth and increased depreciation from network build.
The latter was a key characteristic of the six-month period, with BT reporting capital expenditure (capex) of £2.6bn, up 2% due to increased Openreach investments in fixed network infrastructure offsetting a decline in spectrum. Capex excluding spectrum payments was up 26% annually.
By 30 September, BT’s fibre-to-the-premises (FTTP) estate had passed 8.8 million UK premises, including 2.8 million in rural regions of the UK. The pace of taking gigabit broadband to such regions has attracted criticism of late. In its Connected Nations autumn update, UK comms regulator Ofcom identified a rural-urban broadband connectivity gap persisting in the UK. That said, BT stressed that it was now over a third of the way through the Openreach FTTP build target of 25 million and the overall FTTP footprint was by up over 50% year-on-year.
The company claimed a weekly build rate averaging 62,000 premises in the second quarter, leading to total quarterly net additions of 331,000 with total take up of 27%. The results also showed that over 62% of FTTP orders in the quarter were for ultrafast speeds and 54% were from communications providers external to BT Group.
By the end of the half year, consumer FTTP connections stood at 1.4 million, up 50% annually, and enterprise connections up over 60%. BT added that an initial build was now underway on a further six million premises.
On the mobile front, the half year saw BT-owned EE’s 5G network continue to grow, with next-generation mobile coverage deployed in nearly all UK major towns and cities. During the results period, 5G coverage expanded to a further 14 new towns and cities, and the company said it was on track to hit all population coverage targets by the end of 2022 in line with the company’s objective to remain the UK’s best network.
The EE 5G-ready base stood at 8.2 million by 30 September, with consumer 5G connections more than doubling year-on-year and enterprise 5G connections rising by 90% on an annual basis.
“BT Group remains on the front foot in these turbulent times. Our strategy is working, we’re executing against our plan and we’re confident that we’ll deliver our long-term ambition while underpinning economic growth in the UK,” said BT Group chief executive Philip Jansen.
“Our financial performance is on track: we grew revenue and EBITDA in the first six months of the year and we remain laser-focused on modernising and simplifying BT Group. Given the current high inflationary environment, including significantly increased energy prices, we need to take additional action on our costs to maintain the cash flow needed to support our network investments.”
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