BT To Invest £6bn In Faster Services

BT Group has outlined plans to invest £6bn over the next three years in faster broadband and mobile services.

It plans to offer what it describes as "ultrafast" broadband to 12 million premises by 2020.

The company also reported a 15% rise in annual profits to £3.03bn, helped by stronger demand for broadband and TV services.

Total sales rose 6% to almost £19bn, which includes £1.06bn contribution from mobile operator EE.

Under the investment plan, a minimum of 10 million homes and businesses will receive access to BT's ultrafast broadband service, and the company has an "ambition" to reach 12 million.

Most will receive that via BT's G.fast technology, which is currently capable of speeds of 300Mbps (megabits-per-second), but will be capable of speeds of up to 500Mbps, BT says.

On average UK households received speeds of 29Mbps last year, according to regulator Ofcom.

That would make the new service more than enough for households who want fast broadband to stream movies and play online games.

"Customers want their broadband to be affordable as well as fast and we will be able to do that using G.fast," said BT chief executive Gavin Patterson.

BT also plans to invest in its mobile phone network EE, so it can offer fast 4G coverage to 95% of the country by 2020.

BT said its £6bn investment plan is "subject to regulatory certainty".

According to analysts, BT is indicating that it can only make big investments in infrastructure if it knows that its business can operate without major interference from its regulator Ofcom.

That includes remaining in charge of Openreach, which operates the fibres, wires and cables that connect the country.

Rivals complain that ownership of that Openreach gives BT an unfair advantage and want the unit to be split from BT Group.

So far Ofcom has shied away from that move.

BT's results were boosted by a strong year for BT Consumer, which supplies broadband, telephone and TV services. Sales were up 7% to £4.6bn for the year.

The number of customers for its TV service jumped by 28% to 1.5 million.

BT said audiences for its sports coverage - where it has made massive investment - were up 45%, which it attributed to its live coverage of Champions League and UEFA Europa League matches.

The first leg match between Liverpool and Manchester United in the last 16 of the Europa League was watched by a peak of 2 million viewers, BT said.

BT also shares coverage of the FA Cup with the BBC and has a package of Premier League matches.

While BT is unlikely to recoup the investment in football simply in terms of subscriptions to its TV service and through advertising, analysts say that by offering live sport BT can make its broadband and phone services more attractive in a competitive market place.

"If TV enables BT to achieve a market share in telecoms services significantly higher than it would otherwise have been, the high cost of its TV investments may well prove justified," said Ian Watt, principal consultant at Ovum.

The deal to buy the EE mobile network was cleared in January and BT said the integration of EE was "going well".

"We now see the opportunity to deliver more synergies than we originally expected, and at a lower cost," said Mr Patterson.

BT plans to hire 1,000 new engineers this year as part of an effort to improve customer service.

And it will continue to return customer services to the UK and by March 2017 says it will handle 90% of calls by UK-based staff.

 

http://www.bbc.co.uk/news/business-36210097

5th

May 2016


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