Company to fight regulator
BT targets Ofcom with £6bn fibre plan
After unveiling a 9% rise in adjusted pre-tax profits, the company said it will invest in helping the UK “remain the leading digital nation in the G20”.
This will involve a huge overhaul of the Openreach and EE businesses over the next three years in the first phase of a plan to extend superfast broadband and 4G coverage beyond 95% of the country by 2020.
BT is in talks with Ofcom over the future of its networks division Openreach which also provides the lines used by competitors including Sky and TalkTalk. BT has been accused of not investing enough in the network and providing a poor quality of service.
Today’s announcement will see ultrafast broadband delivered to at least 10 million homes and businesses in the same period, subject to regulatory support, with an ambition to reach 12 million.
BT Group chief executive Gavin Patterson said: “The UK is a digital leader today and it is vital that it remains one in the future. That is why we are announcing a further six billion pounds of investment in our UK networks, subject to regulatory certainty.
“Networks require money and a lot of it. Virgin and BT have both pledged to invest and we will now see if others follow our lead. Infrastructure competition is good for the UK and so is the current Openreach model whereby others can piggyback on our investment should they want to.”
Mr Patterson said: “This has been a landmark year for BT. We’ve completed our acquisition of EE, we’ve passed more than 25m premises with fibre, and we’ve also delivered a strong financial performance. We’ve met our outlook with our main revenue measure up 2%, the best performance for more than seven years. Our profit before tax was up a healthy 9%.
“Customers want to be online wherever they are and we will be there for them. Our multi-billion pound investment plans will see both fibre and 4G reach 95% of the UK and we won’t stop there. The UK is a digital leader and our investment in ultrafast broadband will help it stay ahead.
“The integration of EE is going well and we now see the opportunity to deliver more synergies than we originally expected, and at a lower cost. And we’re reorganising our business to better serve customers both in the UK and internationally.
BT Sport audience up
“We’ve invested across the business and are seeing good results. Our BT Sport audiences are up 45% this year following the launch of UEFA Champions League and UEFA Europa League content. BT Mobile has done well since its launch, building a customer base of over 400,000. And in the business market, we’ve seen very strong demand for our cyber security expertise with our security business growing by 24%.
“Customers are benefiting from our investments but we plan to do more when it comes to service, to meet customers’ rising expectations. That’s why Openreach is tackling missed appointments, why BT Consumer will be upgrading service levels to next day repair and why we’ve hired 900 engineers. We’ve also recruited more than 900 extra contact centre staff. This will enable us to return EE and BT Consumer contact centre work to the UK.
“Our strong overall performance for the year is reflected in our full year dividend, which is up 13%. Our results and the investments we’re making position us well to continue to grow in the coming years. In light of our confidence we are setting out financial and dividend guidance for the next two years.”
Key points for the year:
· Underlying revenue excluding transit up 2%, our best performance for more than seven years. Total revenue up 6% to £18.9 billion.
· EBITDA of £6.58bn, up 5%, including £261m from EE
· Earnings per share up 5%
· Normalised free cash flow of £3.098bn, up 9%, including £261m impact from EE
· Proposed final dividend of 9.6p, up 13%, giving a full year dividend of 14.0p, also up 13%
· BT Consumer TV customer base grew by 28% to 1.5m
· Fibre broadband available to more than 25m premises