Fibre lights up BT half-yearly results

BT has released a mixed set of half-yearly results, showing revenue decline in its key business lines but with acceleration in the adoption of gigabit fibre broadband.

For the half-year ended 30 September 2021, BT reported total revenues of £10.3bn, down 3% on an annual basis, driven by falls in its Enterprise and Global lines and flat performance in Consumer, but partially offset by growth in its Openreach broadband provision business.

This resulted in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of £3.7bn, inching up 1% compared with the end of the first six months on the previous financial year, with revenue decline more than offset by lower costs from the company’s transformation programmes and tight cost management, as well as lower indirect commissions.

Reported profit before tax fell 5% compared with the end of the same time in 2020 to £1bn, primarily due to higher finance expenses partly offset by increased EBITDA.

Among the highlights of the half-year were strong growth in the company’s fibre broadband and 5G segments.

The company said that its Fibre First fibre-to-the-premises (FTTP) build programme roll-out continued to accelerate, reaching “record levels” in the second quarter, building at an average run-rate of 47,300 premises passed per week.

Openreach’s FTTP network now reaches almost six million premises, and BT revealed that as a result of its improving build experience and what it claimed was “continued innovation”, it had lowered its expected average cost to build FTTP to 25 million premises from £250 to £350 per premises passed. FTTP connections have now nearly doubled year-on-year to 1.3 million, and 10 communication providers including Sky and TalkTalk have signed up to Openreach’s Equinox long-term FTTP pricing offer.

The BT Consumer division’s 5G-ready customer base now stands at more than 5.2 million, and its FTTP customer base grew by 85,000 in Q2 to 945,000. The BT-owned EE 5G network now spans around 40% of the UK’s population. Half of BT broadband customers are now subscribed to the converged BT Halo product.

Going forward, BT said that it would embark on a transformation focused on simplifying its product portfolio, simplifying and automating customer journeys, moving to a modern, modular IT architecture, and migrating customers from legacy networks to modern FTTP and 5G networks.

“These results demonstrate an acceleration of pace in the transformation of BT,” said BT chief executive Philip Jansen. “We are creating a better BT for our customers, the country and our investors.

“We’re going further and faster on the UK’s next generation connectivity; we’re modernising BT and bringing down costs; and we’re reinstating the dividend today, as planned,” he said. “BT is on track and with results in-line with our expectations, we are today confirming our financial outlook for FY22 and FY23.

“Looking further out, as we pass the peak of our fibre build and move towards an all-fibre, all-IP network, we expect a reduction in capex of at least £1bn and lower operating costs of £500m.”