Telecoms giant BT Group have today posted a brief trading update to the end of June 2024, which reveals that Openreach added another 1 million premises (unchanged on the previous quarter) to the coverage of their full fibre (FTTP) broadband ISP network – delivering total coverage to 15 million. Take-up also held at a steady 34%.
Take note that, since 2023, the BT Group now only publishes a short trading update in calendar Q1 and Q3 (roughly in line with most FTSE 100 companies), thus we only get a very limited summary this time around – the full details come in Q2 and Q4. As such, we’ve opted to do a similarly brief update on the key details below.
In terms of the headline changes. The latest results also revealed that Openreach’s full fibre rollout was now running at a build rate of 78,000 premises passed per week (unchanged) and related FTTP customers grew to total 5 million (up from 4.701m) across multiple ISPs, which gives them a take-up of 34%. We get a BT Consumer (retail) specific breakdown below.
In addition, it’s worth contrasting these results against BT’s current targets for 2030, which among other things have predicted that their total labour force would shrink to between 75,000 and 90,000 (e.g. many of the engineers they have today won’t be needed post-2030) and FTTP coverage would grow to between 25-30 million premises, while delivering take-up of around 40-55% by this same date.
BT also holds a target of 13.0-14.5 million retail 5G mobile connections via EE, although annoyingly the latest trading update doesn’t provide any data on 5G specific customers or network coverage.
BT’s CEO, Allison Kirkby, said:
“We’ve made a solid start to the year, with excellent growth in both fibre build and connections, and increased EBITDA.
Openreach continues to build at pace and with even more efficiency, passing the milestones of 5 million connections and – just yesterday – 15 million premises built. In Consumer, the widespread availability of FTTP and 5G combined with our new EE propositions has contributed to an improved trend in our customer base, in what remains a very competitive market. In Business, we also saw improved trends, as we continue to modernise our portfolio and our operations towards a simpler business, delivering secure, cloud-based connectivity and communication services for all our customers.
Our ongoing cost transformation contributed to EBITDA growth, and more than offset the expected revenue declines in Consumer and Business in the quarter. There is much more to do to simplify BT Group and deliver for our customers. We remain on track to deliver our financial outlook for this year and our cash flow inflection to c. £2.0bn in 2027 and c. £3.0bn by the end of the decade.”
BT Group’s June 2024 Performance Summary
• Record FTTP build of over 1m premises passed in the quarter at an average build rate of 78k per week; FTTP footprint is now 15m with 4.2m rural premises passed and around a further 6m where initial build is underway
• FTTP customer base surpassed 5m during the quarter; strong FTTP demand with orders up 29% year-on-year; take up rate is at 34% with continued strong net adds of 387k
• Openreach broadband ARPU grew by 6% year-on-year due to price rises and increased volumes of FTTP; Openreach broadband line losses of 196k, with moderately higher competitor losses combined with a weaker overall broadband and new homes market
• Consumer broadband ARPU up 1% year-on-year to £42.4 and Consumer postpaid mobile ARPU increased 0.5% year-on-year to £19.8, with positive mix effects offsetting the expected tougher pricing comparative
• Consumer base trend improved despite a competitive market, with the broadband base down 28k quarter-on-quarter (0.3% decline) and postpaid mobile base down 15k quarter-on-quarter (0.1% decline)
• Business financial performance continues to be impacted by legacy managed contract declines, reduced low margin sales activity and contraction in the portfolio unit offset by cost transformation
• Retail FTTP base grew year-on-year by 36% to 2.7m of which Consumer 2.6m and Business 0.1m; 5G base 11.3m, up 22% year-on-year
• BT Group NPS of 25.1, up 0.3pts year-on-year, demonstrating further improving customer experience
• BT Group has been recognised by TIME Magazine and Statista as one of the “World’s Most Sustainable Companies 2024”
One thing worth noting above is that, despite the rapid growth of their FTTP network coverage, Openreach still suffered a loss of 196,000 broadband lines (across all technologies) as competing networks continued to eat into their overall market share.