BT has announced that Openreach and EE will invest around GBP 6 billion between them over the next three years in the first phase of a plan to extend superfast broadband and 4G coverage to more than 95 percent of the UK by 2020. The plan will include an increased focus on FTTP technology, aiming to reach two million premises with FTTP, mainly in new housing developments, high streets and business parks.
Ahead of the operator's Capital Markets Day, BT Group CEO Gavin Patterson also confirmed that customer service would be another area of focus, with contact centre work being returned to the UK. BT Consumer aims to handle 90 percent of its customers' calls in the UK by March 2017. Similar plans to onshore customer service were already announced by EE earlier, as well as its plans to expand its geographic 4G footprint from around 60 percent today to 95 percent by 2020. In addition, Openreach aims to cut the number of missed appointments by half within 12 months, and BT Consumer will work to reduce the standard time to fix line faults by 24 hours.
This next wave of broadband investment will help BT Group address slow speeds in the final few percent of the country, the company said. The UK has already reached over 90 percent of premises able to receive at least 24 Mbps and half the country can receive 100 Mbps or higher, the government recently announced. BT said it has identified long-reach VDSL as a potential solution to covering more sites, and Openreach will conduct technical trials in the coming months.
Openreach plans to reach in total 12 million premises with 'ultrafast' services by 2020, 2 million more than previously announced. It will use a combination of G.fast and FTTP technologies, with the additional 2 million sites mainly coming from the decision to invest in FTTP. The company said FTTP will target new homes, apartment blocks, rural areas, business parks and high streets, "where it makes economic sense".
The decision to invest in FTTP, after favouring largely FTTC to date, appears to be a concession by BT to Ofcom. In its recent strategic review of the market, the regulator said it plans to propose a further separation of Openreach from BT in order to try and stimulate more investment in FTTP. BT said it has proposed a voluntary agreement to Ofcom to address the regulator's concerns, with measures that could be implemented quickly to avoid market uncertainty. The company said it is in talks with Ofcom about the new governance model for Openreach and "strengthened, proportionate functional separation".
BT added that it was ready to appeal any regulatory measures that impacted its business too much. It is already appealing against Ofcom's decision to introduce a margin squeeze test for VULA services. While the company lost an initial appeal on this in March over whether Ofcom had sufficient grounds for imposing the test, the Competition and Markets Authority is hearing a further appeal over whether Ofcom had the legal right to impose such price controls. BT said it expects a ruling on this in June or July.
