Openreach defers new ultrafast fibre projects in bid to clear backlog

BT’s digital network division, Openreach, is postponing its investment in the rollout of ultrafast fibre broadband in new locations, in an effort to clear the backlog of partially-completed work.

The company has pledged that the ultrafast broadband it is currently building across the UK will be its fastest and most reliable connection.

But it said it is suspending future projects while it completes fibre networks it is already working on, the Financial Times originally reported on Wednesday.

Openreach insisted it is “speeding up, not slowing down” by changing its plans.

The move comes as companies across the UK are feeling the pinch from cost inflation and tougher trading conditions as consumers make cutbacks.

BT’s boss said earlier this month that he is leaving “no stone unturned” to save an extra £500 million in the battle against inflation and energy costs.

Chief executive Philip Jansen said the company is looking to reduce its overall workforce and make BT the “most efficient organisation it can be”.

The comments came as the telecoms giant revealed an 18% drop in half-year pre-tax profits, and said it is bracing for a £200 million increase in its energy bill this financial year.

BT has already cut £1.7 billion in costs since April 2020, with overhaul plans including slashing the number of offices in the UK and cutting the number of consumer tariffs on the market.

Refocusing the rollout of fibre broadband, through Openreach, is expected to form part of the plans to improve efficiencies and cut costs.

Its full fibre broadband currently covers nine million premises and there is a backlog of an additional six million that are partially completed.

Openreach chief executive Clive Selley told the Financial Times that his firm will mainly be suspending work on surveys and estimates for future work that goes beyond that 15 million.

But he said the shift will not affect its target of reaching 25 million homes with full fibre by December 2026, expected to cost the firm £12 billion.

This will amount to building in more than three million premises a year, a rate faster than most network builders in Europe, the company said.

An Openreach spokesman said: “We expect to build ultrafast full fibre broadband to more homes and businesses next year, not fewer, so we’re speeding up, not slowing down.

“As our recent results show, we’re investing £200 million more than we expected to this year on the build, and orders for full fibre services are at record levels.

“In fact, nine million homes and businesses can already order our full fibre service from a large range of service providers, so it makes sense for us to put more resources into upgrading customers and fulfilling orders as quickly and smoothly as possible.

“We’ve also partially built the new network to a further six million premises, so we’re focused on completing that work.”