Openreach, the network unit of UK-based BT Group, is planning to limit investment in the deployment of full fibre in a bid to reduce costs amid rising inflation, the Financial Times (FT) reports. Citing a letter it has seen regarding the matter, the news outlet reports that Openreach has contracted suppliers to advise them that it will build its fibre-to-the-premises (FTTP) network ‘narrower and deeper’, while noting it intends to ‘tighten the timing of investment’ and will not commit capital to projects that are further than six months out. ‘This will by necessity include an element of cancellation or suspension of a job you have received and/or validated … It is clear that there will be a financial impact to you as we implement these plans,’ the letter noted.
BT will now reportedly focus on completing full fibre rollouts in areas where work is partially finished, rather than break ground in new areas, according to Openreach CEO Clive Selley in response to an inquiry regarding the letter. Despite this, the executive insisted the scaled back investment plans will not impact Openreach achieving a target of reaching 25 million premises with FTTP by 2026.
A decision to scale back investment comes after BT earlier this month revealed it was increasing its cost-cutting target from GBP2.5 billion (USD2.9 billion) to GBP3.0 billion by end-2025. Previously, BT CEO Philip Jansen had confirmed: ‘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.’