Blueprint
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Date of
Announcement: 01 February
2018
BT Group plc
(Translation
of registrant's name into English)
BT
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EC1A 7AJ
England
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________
1st
February 2018
Openreach launches 'Fibre First' programme to make Fibre to the
Premises broadband available to three million UK homes and
businesses by the end of 2020
● First eight cities
named as build accelerates from 2018 to cover urban and rural
communities
●
Sets course to reach 10m homes and businesses by mid-2020s with the
right conditions
●
Plans to recruit and train 3,000 field engineers in
2018
Openreach,
Britain's national broadband infrastructure provider, today
announced an acceleration of its Fibre to the Premises (FTTP) build
programme to enhance Britain's digital infrastructure and to
reinforce the UK's position as the leading digital economy in the
G20. 1
Openreach is
extending its current Fibre to the Premises (FTTP) build target by
50% to reach three million premises by the end of 2020 through its
new 'Fibre First' programme2. Birmingham,
Bristol, Cardiff, Edinburgh, Leeds, Liverpool, London and
Manchester make up the first phase of the programme which will
connect up to 40 UK towns, cities and boroughs with
FTTP3 with
build starting in 2018. Openreach will also continue to focus on
delivering FTTP to rural areas, in partnership with the Government,
to make sure some of the hardest to reach communities in the UK get
access to future-proofed, FTTP networks.
Fibre
First reconfirms Openreach's ambition to build a large-scale FTTP
network in the UK and accelerates the next fundamental upgrade of
critical UK infrastructure. With the largest FTTP footprint in the
UK4,
Openreach is best placed to deliver the infrastructure required, at
scale, to maintain the UK's position as a leading digital economy.
An FTTP network has substantial and far-reaching benefits for UK
citizens, businesses, society and the economy. The benefits
include: better, more reliable service; fewer faults; and faster,
more predictable and consistent speeds. The platform would be
future-proof, supporting the speed requirements of customers for
decades to come.
The
pace and extent of this large-scale investment will depend on the
speed with which the conditions to enable an acceptable return on
the investment are secured. Support is needed from Communication
Providers (CPs), central and local Government and the regulator to
deliver key enablers, including: achieving low build and connection
costs; achieving rapid take-up of and generating incremental
revenue from the platform; and having a supportive regulatory and
public policy framework. As with any infrastructure investment, if
Openreach is unable to secure an acceptable return, it will need to
review its ongoing capital commitments to the
programme.
Reaching three
million premises by 2020 sets Openreach on the right trajectory to
achieve its ambition of building a ten million FTTP footprint by
the mid-2020s and, if the conditions are right, to go significantly
beyond, bringing the benefits of FTTP to the majority of homes and
businesses across the UK.
1 Defined as a
proportion of GDP - according to Boston Consulting Group
research.
2 The Fibre First
programme will see Openreach build FTTP to a further
c.800,000 premises in BDUK
areas and new housing sites, and to c.1.7 million premises in towns
and cities.
3 FTTP connections can
deliver ultrafast speeds up to 1Gbps
4 Openreach has
already provided 500,000 residential premises in Britain with
access to FTTP, the
majority of which are rural areas.
Clive
Selley, Chief Executive of Openreach, said: "Through the Fibre
First programme, Openreach is getting on with the job of building
an Ultrafast Britain. We are accelerating our plans to build FTTP
to three million premises by 2020 which sets the course to reach
ten million by the mid-2020s with the right conditions. Where
possible going forward, we will 'fibre first'.
"Working closely
with Central and Local government and our Communication Provider
customers, we will identify the cities, towns and rural areas where
we can build a future-proofed, FTTP network that's capable of
delivering gigabit speeds to all homes and businesses at an
affordable cost.
"We'll
continue to invest in our people and we're already in the process
of re-training and upskilling to make Fibre First a reality. We
plan to hire around 3,000 engineers in 2018/19 to kick-start Fibre
First and further improve the reliability and performance of our
existing networks."
Gfast*
remains a critical component of Openreach's ultrafast strategy and
an important platform that will be deployed at scale in the UK to
millions of premises. Gfast allows Openreach to deliver ultrafast
speeds over existing copper lines. It builds on existing Openreach
networks, so it is quick to deploy with minimal disruption and at
relatively low cost. Openreach remains committed to rolling out
Gfast at speed. Openreach will employ a Fibre First ethos and will
not build Gfast and FTTP to the same locations.
An
initial consultation by Openreach, which was open to all CPs and
concluded in autumn 2017, found there was broad support for
Openreach to start building a large-scale FTTP network in the UK.
The consultation also helped Openreach to identify a set of
enablers needed to underpin a viable commercial business case. The
enablers remain important for the first wave of FTTP investment to
be successful, and critical for Openreach to sustain a high rate of
build into the mid-2020s and reach its ambition of ten million
premises.
Enablers
1.
Build and connection costs
The
cost of building FTTP varies significantly depending on the exact
location. Openreach expects the cost of building FTTP in towns and
cities over the next three years to be around £300-£400
per premise passed. If the costs of battery back-up are excluded
for the majority of customers, we expect connection costs to be
around £150-£175.
2.
Take-up and Revenue
The
consultation identified three sources of value: lower Openreach
operating costs enabled by the new platform; incremental revenue
per line from Openreach's wholesale charges to CPs; and the benefit
to Openreach from a more competitive network. Our further analysis
continues to indicate that all three sources of value will be
needed to secure acceptable returns.
To
maximise the potential of a large-scale new FTTP deployment,
Openreach believes it is essential to move all customers onto the
new network quickly once built. In the first instance Openreach
believes mass market adoption at competitive prices5 can be pursued
through commercial agreements with CPs, and will explore models to
achieve this in parallel with accelerating its FTTP build.
Ultimately a 'switchover' process will be required, moving all
customers onto the FTTP network so that everyone benefits.
Openreach will consult with CPs and other stakeholders on how this
can be achieved in due course.
3.
A supportive regulatory and public policy framework
To
maintain momentum on building more FTTP into the 2020s, a
supportive regulatory and public policy framework is essential.
Openreach is encouraged by its initial engagement with both Ofcom
and Government, and looks forward to continuing to work with both
to secure the right conditions for sustained commercial investment.
Key requirements include:
i. the
extension of Cumulo rates** relief to better reflect the long-term
nature of FTTP infrastructure
investment timescales;
ii.
certainty around the fair bet framework to ensure that initial and
subsequent rounds of investment have
the opportunity to earn returns that fully reflect the risk taken
at the time of investment, and where competition is effective,
greater commercial freedom;
iii.
support for and help with a switchover process when this ultimately
becomes required to maximise the benefits of the
platform;
iv.
close partnerships with local authorities to reduce red tape and
provide a smooth path to delivery. Openreach has already piloted a
co-located Fibre First team with the City of London Corporation and
will now replicate this model with other local authorities as part
of the Fibre First project.
ENDS
Notes to editors
For further information
Enquiries
about this story can be made to the Openreach PR team on: 020 7809
7950 or email press@openreach.co.uk.
All
news releases can be accessed on our web
site.
*Developed
at BT's world-leading research and development facility at Adastral
Park, Suffolk, Gfast technology changes the way today's broadband
is transmitted. It allows ultrafast speeds, which previously
required fibre optic cables to be run all the way to a property
(FTTP), to be transmitted over existing copper lines and fibre
broadband cabinets. This is significant as Gfast will enable
Openreach to make ultrafast fibre available more quickly to a much
larger number of homes and businesses than if it focused on FTTP
alone.
**
"Cumulo rates‟ is the phrase used to describe a tax on
commercial property. The "commercial property" taxed in this way is
defined by the Valuation Office Agency ("VOA") as BT‟s
network (ducts, poles, parts of exchange buildings and other
assets).
5 Current connection charges for ultrafast FTTP 160Mbps
range from £92 to £117. Openreach's current ultrafast
FTTP pricing ranges from £19.78 to £21.39 for 160Mbps
with connection fees for £92
About Openreach
Openreach
is Britain's digital network business.
We're
30,400 people who connect homes, mobile phone masts, schools,
shops, banks, hospitals, libraries, broadcasters, governments and
businesses - large and small - to the world.
Our
mission is to build the best possible network, with the highest
quality service, making sure that everyone in Britain can be
connected.
We work
on behalf of more than 590 communications providers like SKY,
TalkTalk, Vodafone, and BT, and our fibre broadband network is the
biggest in the UK, passing more 27 million premises. We're also the
platform for Britain's thriving digital economy, which is the
largest in the G20.
We're
working hard to give people the speeds they need to run and enjoy
their daily lives. Over the last decade, we've invested more than
£11 billion into our network and we now manage more than 160
million kilometres of cable stretching from Scotland to Cornwall,
from Wales to the east coast. And we're continuing to take that
network further - making superfast broadband speeds available to
thousands more homes and businesses every week.
Openreach
is a wholly owned and independently governed division of the BT
Group, and it is a highly regulated business, with more than 90 per
cent of our revenues generated from services that are regulated by
Ofcom.
Any
company can access our products under exactly the same prices,
terms and conditions.
For the
year ended 31 March 2017, we reported revenues of
£5.1bn.
For
more information, visit openreach.co.uk
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BT Group plc
(Registrant)
By: /s/
Dan Fitz, Company Secretary
--------------------
Dan
Fitz, Company Secretary.
Date
01 February
2018