Record fibre growth fails to halt mixed Q3 for BT

Despite its Consumer division showing quarterly growth in its fibre-to-the-premises (FTTP) base recaching unprecedented levels, up 155,000 to 1.6 million and its 5G-ready base now extending to 60% of the UK population, BT has reported disappointing third-quarter results with year-on-year falls in revenue and profits.

For the nine months to 31 December 2022, BT posted revenue of £15.6bn, slipping back one percentage point on an annual basis. This was attributed to price increases and improved trading in the Consumer and Openreach broadband provision lines offset by lower strategic equipment sales in Global, migration of an MVNO customer, removal of BT Sport revenue and legacy product declines. For its Sports Joint Venture (JV) with Warner Bros. Discovery, pro forma adjusted revenue was up £65m.

Adjusted EBITDA at the end of the first three quarters of the fiscal year was £5.9bn, up 3% compared with 2021, and said to be due to tight cost control and the removal of BT Sport costs, offset by revenue declines and inflationary cost pressures. Sports JV pro forma basis adjusted EBITDA was up 2%.

Reported capital expenditure (capex) in the nine months was £3.9bn, up 3% due to increased investment in the Openreach fixed network infrastructure offsetting prior-year investment in mobile spectrum for the EE business. Capex excluding spectrum payments totalled £4.1bn, up 19% compared with the same period in 2021. BT’s total reported profit before tax was £1.3bn, down 15% due to increased depreciation offsetting EBITDA growth.

Noting highlights for the reporting period, BT noted a record FTTP build of 810,000 premises passed in the third quarter of 2022 at an average build rate of 62,000 per week, with 38% of the build completed in its aim to reach 25 million homes and businesses with full-fibre by December 2026. Customer demand for FTTP was described as extremely strong, with orders up 51% year on year and a take-up rate which grew to 29% with net adds of 324,000 in the quarter, as well as broadband rental ARPU up 7.6% year on year.

BT emphasised that Openreach announced improved discounts for FTTP connection and rental charges, from April 2023, to support accelerated take-up of FTTP services, with 1.2Gbps and 1.8Gbps products to be launched.

Commenting on the results, BT chief executive Philip Jansen said that despite a challenging economic backdrop, the company was transforming BT Group for the benefit of its customers. “We continue to accelerate our investments in the UK’s leading next-generation networks,” he said. “On full-fibre, we’re building – and now connecting – like fury: 9.6 million premises reached to date, with 29% already connected, and our 5G mobile network now reaches 60% of the UK population.”