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[Bowdon]

https://www.ispreview.co.uk/index.php/2019/01/bt-end-2018-on-uk-fttp-and-gfast-broadband-cover-of-2-6m-premises.html

BT Group has released their results to the end of December 2018 (Q3 – 18/19 financial), which reports that Openreach’s FTTP and G.fast based “ultrafast broadband” (100Mbps+) UK ISP network has grown its coverage from 1.97m premises passed to 2.6m in the last quarter. Take-up of FTTP is 29.9% and G.fast just 0.88%.

As usual we’ve seen a number of developments from the BT Group over the past quarter, although the main ones have reflected Openreach’s most recent roll-out announcements for their hybrid-fibre G.fast technology and “full fibre” FTTP lines; the latter also included news of a plan to hire 3,000 extra engineers during 2019.

On top of that Openreach recently reached a deal with their ISP customers regarding Ofcom’s forthcoming scheme of automatic compensation for broadband faults and delays and they’ve just started a trial of the future self-install service for G.fast lines.

The operator has also had to defend against rival operators, which appear to be concerned that Openreach may hamper “full fibre” (FTTP) competition in the commercial market. But separating such concerns from the dynamics of natural commercial competition in urban areas will be a tricky argument to win.

Elsewhere BT’s sibling mobile operator EE has announced the first 16 UK cities for their commercial 5G roll-out and confirmed the removal of Huawei’s kit from their core network. Sadly during the quarter EE was also fined £6.5m by Ofcom for overcharging customers (those on discounted deals) who wished to leave their contracts early.

Financial Highlights – BT’s Quarterly Change
* BT Group revenue = £5,982m (up from £5,908m)
* BT Group profit after tax = £594m (up from £503m)
* BT Group total net debt = -£11,114m (down from -£11,895m)

    BT Group’s Capital expenditure

    Capital expenditure for the nine months to 31 December 2018 was £2,810m (2017/18: £2,571m) including network investment of £1,514m, up 17% due to increased investment in FTTP and the increase in our base-case assumption for customer take-up under the Broadband Deliver UK (BDUK) programme announced last quarter, partly offset by lower mobile investment as the Emergency Services Network (ESN) passed the peak deployment phase.

    Other capital expenditure components were up 2% with £683m spent on customer driven investments, £494m on systems and IT, and £119m spent on non-network infrastructure. Excluding the effect of the increase in our BDUK base-case assumption, capital expenditure was £2,641m.

    Gavin Patterson, CEO of BT Group, said:

    “We have continued to deliver consistently against our strategic objectives in a tough market, resulting in another sound quarter of operational and financial performance.

    In Consumer we launched the next version of our converged consumer offering, BT Plus with Complete Wi-Fi. Following successful trials in London we announced our plan to launch 5G in 16 UK cities in 2019. Openreach accelerated its FTTP commissioning and has now passed 890,000 premises. We are ready to expand our FTTP programme up to and beyond 10 million premises if the conditions are right.

    Our overall outlook for the full year remains unchanged, with EBITDA around the top end of our guidance for FY 2018/19. We continue to expect regulation, market dynamics, cost inflation and legacy product declines to impact in the short term before being more than offset by improved trading and cost transformation by our 2020/21 financial year.

    I am handing over the business with good momentum behind its ongoing transformation programme and wish my colleagues all the best for the future.”

[Bowdon]

I know there is lots of good information in the story, and lots to expect with the future. But the shock line for me was this;

Take-up of FTTP is 29.9% and G.fast just 0.88%.

If you have a G.fast connection and it works for you and you're happy about it then that is good. I'm not having a dig at the G.fast technology.

But this take-up rate confirms my suspicion of what would happen. That G.fast is mainly available to people who already have the top speed FTTC product so they would be less likely to upgrade further as they would be 'happy' with their current service. Whereas FTTP is probably more available to people who don't get the top FTTC speed so take up is higher.

I think G.fast as been a failed delivery method. If they had kept to their original plan (to put it on poles near peoples houses), or even a modified version of that, take up would have been through the roof. G.fast was expected to be a stepping stone, yet it appears hardly anyone as stepped on that first stone!

I think its about time they stopped deploying G.fast pods and activate the ones that are currently in place. Then focus 100% on FTTP.

[j0hn]

Not that simple, but I do agree.

If Openreach came along and installed FTTP in my streeet I'd be amazed if a single resident didn't notice the work being carried out.
If they installed G.Fast tomorrow I'd be amazed if a single resident did notice.

FTTP is the only option on new sites, while G.Fast is always optional as it isn't installed where there isn't FTTC already.

Even if G.Fast was available to everyone on a cabinet, take-up would still likely be well short of FTTP.

With FTTP it's either your only choice, or it's a very visible install.

[gt94sss2]

But this take-up rate confirms my suspicion of what would happen. That G.fast is mainly available to people who already have the top speed FTTC product so they would be less likely to upgrade further as they would be 'happy' with their current service. Whereas FTTP is probably more available to people who don't get the top FTTC speed so take up is higher.

I think G.fast as been a failed delivery method. If they had kept to their original plan (to put it on poles near peoples houses), or even a modified version of that, take up would have been through the roof. G.fast was expected to be a stepping stone, yet it appears hardly anyone as stepped on that first stone!

I actually think you're wrong and that take up of g.fast as per Openreach's original plans would not have had a much higher take up rate at the current time.

TBB summarised quite well in their article why g.fast vs FTTP take up is the wrong comparison to consider:

Looking at the take-up of the G.fast and FTTP services we have some important insight to share, on the basic numbers there are 15,000 live G.fast connections (0.88% take-up) and for FTTP 267,000 connections (29.9% take-up). This suggests that FTTP is massively more popular than G.fast and some may incorrectly conclude that Fibre First is a run away success in the FTTP areas. The reality is that the vast majority of the live FTTP connections to date are from new build homes (full fibre often the only option) or in slow areas where the other option is just ADSL or ADSL2+ or is the first fixed line broadband option and in those slow areas people will very quickly sign up.

G.fast is often competing in areas where there is Virgin Media cable available and the majority already have VDSL2 available around the 70 to 80 Mbps connection speed, and therefore if looking at take-up it may be fairer to compare the take-up to take-up of the faster Virgin Media services e.g. the 350 Mbps product appears to have a 1-2 % take-up and that is after being marketed for a number of years

[Chrysalis]

Openreach are gradually realising g.fast isnt the golden goose they thought it originally was, only time will tell how much they backtrack on their planned reliance on it.

Given my area has VM cable, seems good for cityfibre rollout and openreach only have g.fast planned for it, I cannot see how it will get any decent take up.  I am thinking surely they will have to change the g.fast to FTTP even if its a last minute decision.

What we dont know if is g.fast has improved VDSL sales for BT.

g.fast allows them to advertise higher speeds, so someone may get drawn to the BT website from the g.fast speeds, and only order VDSL, but without the g.fast speed headline maybe would have gone elsewhere.