The BT Group has today published their latest biannual H1 FY25 results to Sept 2024, which reveals that Openreach’s UK full fibre (FTTP) broadband ISP network added 2.1 million premises to their coverage in H1 to cover 15.9m, while EE’s 5G mobile coverage increased to 80% of the population (up from 75% in H2 FY24). The fibre build rate has also been accelerated again.
The group’s consumer divisions – including BT, EE and Plusnet – reported being home to a total of 8.234 million broadband connections (down from 8.283m six months ago), which included 2.775m FTTP customers (up from 2,428m). On top of that, BT’s business divisions had 609,000 broadband connections (down from 641k) and 112,000 of those were FTTP lines (up from 94k). BT Wholesale also supplied a total of 691,000 broadband lines to other ISPs (up from 680k) and 82,000 of those were FTTP (up from 62k).
In terms of consumer mobile connections, EE reported total mobile customers of 13.875m (up from 13.859m), including 10.468m using 5G (up from 9.835m). On top of that, BT reported that their fixed broadband consumers gobbled an average of 436.5GB of data per month (up from 409.3GB), which falls to 16.7GB for EE’s post-paid mobile users (up from 16.5GB).
Elsewhere, some 66.8% of BT’s fixed consumer base take a “superfast broadband” product (down from 69.8% in FY24 H2) and 28% (up from 24.4%) have adopted one of their “ultrafast” products – the latter includes both G.fast and FTTP, which these days largely reflects FTTP cannibalising customers from slower (FTTC and ADSL) packages.
ISPreview also noted that 23.1% of BT’s customers are now taking both mobile and broadband (converged), which is up from 22.9%.
Financial Highlights – BT’s Half-Yearly Change
* BT Group revenue = £10,138m (down from £10,421m in H2 FY24)
* BT Group total reported net debt = £(20,267)m (increased from £(19,479)m)
* BT Group profit after tax = £755m (up from £11m)
Openreach’s Network
The table below offers a breakdown of fixed line network coverage and take-up by technology on Openreach’s UK network, which covers the totals for all ISPs that take their products combined (e.g. BT, Sky Broadband, TalkTalk, Zen Internet, Vodafone etc.).
As usual, the rollout of their Fibre-to-the-Premises (FTTP) lines continues to grow, with 2.1 million premises being added in H1 and that’s up from 1.96m in the previous half. As for take-up, some 5.53 million FTTP broadband connections have been made on Openreach’s network (up from 4.7m in H2 FY24), which equates to a take-up of 35% (up from 34%).
The rapid rollout of a new network almost always tends to suppress the take-up figure, thus Openreach continues to do extremely well to buck that trend – all despite an increasingly significant amount of competition from rival networks. This also goes to highlight the challenge alternative networks are facing, although they have managed to peel consumers away from the resident industry giant’s older network, with Openreach’s total broadband lines falling from 20.96m to 20.59m in the half (377k).
Openreach noted that they have increased their FY25 FTTP build target to 4.2 million premises “within our existing capex envelope driven by build cost efficiencies” and the operator claims to still be “on track to reach 25m by December 2026“. Finally, the network access provider highlighted how the growing take-up of FTTP has also contributed to a reduction in 12-month repair volumes of 0.3m to 3 million (fibre is a lot more reliable than copper), supporting growth in margin and EBITDA.
Allison Kirkby, CEO of BT Group, said:
“We have accelerated the modernisation of BT Group in the first half of the year. We’ve ramped up our full fibre build and connections, seen further improvements in customer satisfaction, and our cost transformation contributed to growth in EBITDA and normalised free cash flow despite revenue declines driven by our non-UK operations and a competitive retail environment.
Our nationwide full fibre rollout has set new records, now reaching more than 16 million premises, and we have further extended our industry-leading take-up rate to 35%. Our cost to build continues to reduce, enabling us to increase this year’s build target to 4.2 million with no additional capex spend. We also expanded our 5G network to cover 80% of the UK population, more than any other operator. These investments in the UK’s next generation networks are enabling much better experiences, reflected in our improved net promoter scores.
We are confirming our EBITDA, capex and cash flow guidance for FY25, albeit on lower revenue guidance. We remain firmly on track to meet our long-term cost savings and cash flow targets, and today announce an interim dividend of 2.40pps. The accelerated modernisation of our operations, combined with a focus on connecting the UK, puts us in a strong position to generate significant value for all our stakeholders.”
Take note that BT now only publishes detailed results biannually for H1 and H2 (financial quarters), thus they release very little data for the other two quarters and that similarly means we will only be able to do two detailed reports – like the one above – every year, instead of four.
Just a quick reminder. BT introduced a new metric in 2023, which predicted that their total labour force would shrink from 130,000 to between 75,000 and 90,000 by 2030. The operator also predicted that Openreach’s FTTP coverage would grow to between 25-30 million premises and deliver take-up of between 40-55% by that same date. The latest report includes a quick progress update on this.
BT Group’s Progress Against Strategic Metrics:
• FTTP premises passed increased by 2.1m to 15.9m; target of 25-30m
• Openreach take-up increased to 35% and retail take-up increased by 0.4m to 3.0m; targets of 40-55% and 6.5-8.5m respectively
• 5G UK population coverage increased to 80% and 5G retail connections increased by 1.1m to 12.5m; targets of >98% and 13.0m-14.5m respectively
• Total labour resource decreased by 2k to 118k; target of 75-90k
In May 2024, BT also announced a further cost transformation target of £3bn gross annualised cost savings by the end of FY29 at a £1.0bn cost to achieve, after successfully delivering on a previous £3bn gross annualised cost savings target 12 months early. The operator said they are on track to deliver on this, with £0.4bn gross annualised cost savings achieved in H1 FY25 at a cost of achieve of £0.2bn.
UPDATE 3pm
The new Government’s decision to raise employers’ National Insurance (NI) contributions also looks set to hit BT for an extra £100m, which the operator has signalled will trigger a review of consumer pricing (i.e. expect larger price hikes), alongside efforts to cut costs in their supply chain and adopt more AI to find savings via automation.