Openreach hits milestone despite slowing demand

Openreach female engineers
Openreach: half-way point

Openreach is investing a further £50 million into its full fibre roll-out in Scotland as it reaches the halfway point in its UK-wide plan to reach 25 million premises by the end of 2026.

However, a slowdown in housebuilding and the rising cost of living has hit demand and raised some concern for its chief executive Clive Selley.

“The market for broadband in the UK has stopped growing and I’ve never seen that before,” he said.

In a statement, the company said it is building full fibre faster and further than any other UK provider, reaching around 60,000 premises every week – equivalent to a town the size of Livingston. That means passing another home or business with ultrafast, gigabit-capable broadband every ten seconds.

Openreach intends to keep building after it reaches its initial 25 million target, reaching up to 30 million premises with full fibre by the end of 2030.

There are 142 new locations – including 25 in Scotland – where it will deliver full fibre to around 1.4 million more homes and businesses.

Robert Thorburn, Openreach Scotland partnership director, said: “We’re delivering engineering on an epic scale, on time and on budget, with another £50m investment across Scotland now going to reach 167,000 more homes. 

“From a standing start just a few years ago, we’ve made this life-changing technology available to more than a million Scottish premises and we’re adding thousands more each week, building further and faster than any other operator.

“Our build rate is still accelerating and we’re focused on reaching our next million Scottish properties faster than ever. Ultimately, our investment unlocks huge economic and social benefits by supporting the economy, education, healthcare and public services.”

However, his boss conceded that domestic economic pressures presented a cooler outlook for broadband demand.

“The cost-of-living thing is real for people and they are reining back their spending wherever they have the opportunity to do so,” Mr Selley told The Times.

Financial pressures were evident among his 35,000 staff.

“As we try to contain our costs, we’re offering less overtime to some of our people. I get letters from my people saying ‘I need this overtime, I need the money, my family depends on this.’ People are hurting.”

He added: “I can’t remember housebuilding being at such a low level. There is a direct correlation between the number of homes being built and new broadband take-up.

“I was expecting about 210,000 homes to be built this year that I would go in and fibre. I think that will more likely turn out to be 170,000 to 190,000. And that’s a real barometer for what’s going on in the economy.”

Openreach was carved out of BT in 2017 to improve infrastructure performance and competition.

The company cut prices this year through an agreement titled Equinox 2 in response to customer demand. It was approved by Ofcom, the telecoms watchdog, but competitors , known as altnets, such as CityFibre and Virgin Media 02, complained that it restored the old BT Openreach monopoly.

In an interview with Daily Business in October, chief commercial officer Katie Milligan said: “There is nothing stopping anyone going to other altnets. The monopoly argument has not been upheld.”

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