New BT chief executive Philip Jansen is set to present his first set of results later this week and reports over the weekend suggested he could deliver an update on the Openreach’s plans for fibre.
BT-owned Openreach is embarking on a major build of fibre to the premise FTTP), with ambitions to reach 10 million premises by the middle of the next decade. It has pledged to expand the scope of this rollout if the investment conditions are right.
The rollout is supported by the government, which wants 15 million properties to be connected to fibre by 2025 and wants nationwide coverage to be completed by 2033. It would then consider switching off the UK’s copper infrastructure.
- Openreach recruits more fibre engineers
- EE to launch 5G in 2019
- What is 5G? Everything you need to know
However, several other companies are investing in fibre, with a number of smaller infrastructure players recently bought out by equity firms. This has led to concerns that BT – the UK’s largest telco – could be left behind.
The FT reports that BT is considering giving Openreach the appropriate resources to expand its 2020 target from 3 million premises to 3.5 million and to increase its mid-2020s goal from 10 million to 15 million. However, any decision could wait until the end of 2019.
To date, Openreach has made FTTP available to 1.2 million homes and businesses and is connecting 14,000 premises a week.
BT has guaranteed its £1.5 billion dividend for 2019 and 2020 but could be tempted to reduce this figure afterwards in order to fund further fibre deployment. The last time he dividend was cut was in 2009.
The Times says investors would be willing to accept a reduction – some even earlier than 2020 – if BT promised the added investment would result in long-term gains. But even if there was general approval for such a move, it could impact the firm’s share price.
BT has been approached for comment.
- Here are the best BT broadband deals for May 2019