Thousands more Scottish homes to gain full-fibre broadband as BT accelerates roll-out
Telecoms giant BT plans to invest parts of a government tax deduction in rolling out its fibre broadband network to an additional five million homes, potentially leading to thousands of extra jobs.
The group is to accelerate the delivery of full fibre internet to 25 million homes across the UK, including in Scotland, by December 2026, ahead of its previous target of 20 million homes. It will be undertaken through its separate network arm Openreach.
A recent review of the telecoms market by Ofcom, and a tax deduction announced by the UK government in March, will allow it to “increase and accelerate” the roll-out, BT said.
Chief executive Philip Jansen said: “Today we are increasing and accelerating our FTTP (fibre to the premises) target from 20 million to 25 million homes and businesses by December 2026 to deliver further value to our shareholders and support the government’s full fibre ambitions.”
Katie Milligan, chair of the Openreach Scotland board, said: “We’re proud that BT is increasing its ambition for Openreach.
“We’ve already proved we can build ultrafast and ultra-reliable full fibre broadband to hundreds of thousands of Scottish homes and businesses at pace, and without compromising on quality.
“We’re also encouraged by the demand we’re seeing and, allied to our experience and innovation in scaling up the build, this gives us confidence that we can reach hundreds of thousands more at world-class cost points.
“Research shows how full fibre can make us more productive, competitive and green as a nation, and it can enable 76,000 people to return to the Scottish workforce, boosting the economy by billions.”
News of the accelerated roll-out came as BT reported a dip in its financial performance for the last year.
Between April 2020 and March 2021 – a year overshadowed by the pandemic – profit fell by 23 per cent to £1.8 billion.
This was largely because of falling revenue, which was down 7 per cent to £21.3bn, in part due to the impact of coronavirus on the group’s consumer and enterprise divisions. Investment in fibre and a bonus for frontline staff also ate into profits, BT noted.
Jansen added: “BT comes out of this challenging year as a stronger business with an even greater sense of purpose.
“After a number of years of tough work, and as we look to build back better from the pandemic, we’re now pivoting to consistent and predictable growth.”
The business said it plans to bring back its dividend, which was suspended due to Covid, during this financial year. The payout is expected to reach 7.7p per share.
Keith Bowman, an equity analyst at Interactive Investor, said: “BT is trumpeting a tough but transitional year with these full-year results.
“Full-year results were hindered by reduced business use during pandemic closures, and the numbers are light of expectations. Adjusted earnings (Ebitda) were down 6 per cent to £7.4bn.
“Guidance for the year ahead has also been crimped given increased capital expenditure under its upgraded fibre build plans.
“For now, and while clear assessment continues to be blurred by Covid, a growing fibre business and an undemanding valuation leave analyst consensus opinion currently pointing towards a ‘buy’.”