BT annual EBITDA drops 2%; Openreach targets 4m FTTP premises by March 2021

10 May 2019

British fixed line incumbent BT has revealed that its network arm Openreach is ‘increasing and accelerating’ its investment in fibre-to-the-premises (FTTP), and now expects to pass four million premises with the technology by March 2021. Having previously set a target of three million premises by that date, looking further ahead Openreach is now reportedly aiming to pass 15 million FTTP premises by ‘the mid-2020’s’, up from an earlier target of ten million. It noted, however, that this new long term goal is only likely to be achieved ‘if the conditions are right’, with it making specific mention of ‘regulatory and Government’s policy enablers, including support for wayleaves and extension of business rate relief’.

In terms of existing coverage, as part of the publication of its results for the financial year ended 31 March 2019, BT revealed that Openreach’s ultrafast broadband network has continued to expand. At that date it passed more than 3.2 million premises, with 2.020 million of those passed by G.fast technology, up from 1.015 million a year earlier, and the remaining 1.247 million passed by FTTP (Mar-18: 567,000). With regards to the number of customers actually being served by its network, BT noted that it had a total of 21.119 million broadband connections at end-March 2019, up from 20.766 million a year earlier. Of the total more than half – 11.891 million, up from 9.624 million – were being served over fibre-to-the-cabinet (FTTC) technology, while FTTP and G.fast accesses stood at 306,000 and 25,000, compared to 169,000 and 3,000 at March 2018, respectively.

Away from fixed broadband, BT confirmed that mobile unit EE is planning to launch 5G ‘imminently’ and remains on track to expand coverage to 16 cities in 2019 with a range of device partners. It confirmed that the initial launch phase will see 5G connectivity introduced in the UK’s four capital cities plus Birmingham and Manchester, followed by the busiest areas of ten more cities, ‘on 1,500 existing 4G sites’. As has been the case in recent quarters, however, BT again published no information regarding wireless subscriber take-up.

In terms of the company’s financial performance in the year to 31 March 2019, BT’s reported revenue was GBP23.428 billion (USD30.5 billion), with adjusted revenues standing at GBP23.459 billion; both figures represented year-on-year growth of around 1%, as turnover growth in the consumer sector was offset by regulated price reductions in Openreach and declines in the company’s enterprise businesses, ‘in particular in fixed voice’. Adjusted EBITDA for FY 2019 totalled GBP7.392 billion, down 2% year-on-year, with BT’s reported profit before tax standing at GBP2.666 billion in the year under review, representing a 2% annualised increase. Capital expenditures for the twelve-month period were GBP3.963 billion, up by GBP441 million against the previous fiscal year.

Looking to the future, BT’s guidance for FY 2020 is for adjusted revenues to decline by 2%, while it expects adjusted EBITDA of between GBP7.2 billion and GBP7.3 billion and capital expenditures of between GBP3.7 billion and GBP3.9 billion.

United Kingdom, BT Group (incl. Openreach), Openreach