Openreach cuts UK ultra-fast fiber broadband

Openreach will limit its investment in ultra-fast fiber broadband deployment as BT pushes ahead with an intensive cost-cutting scheme.

The telecom giant’s network division has contacted providers to say it would build the network “tighter and deeper” and tighten timelines, according to a letter seen by the financial times.

“This will necessarily include an element of cancellation or suspension of a job you have received and/or validated,” the letter stated. “It is clear that there will be a financial impact to you as we implement these plans.”

It comes after the FTSE 100 firm announced a new cost reduction target of £2.5bn to £3bn by the end of 2025 as a result of inflationary pressure.

Chief Executive Philip Jansen said that while he supported the current drive for efficiency, the company needed to take “additional steps on our costs to maintain the cash flow necessary to support our investments in the network.”

The company saw power bills rise by £200m this year and continued pressure from the Communication Workers Union (CWU) strike.

Boris Johnson’s government has vowed to “raise the bar” for the nation by providing next-generation speed broadband to most homes by 2025, hoping to address gaps in rural areas.

The decision to limit expansion plans could work in favor of major rivals such as Virgin Media O2, which may capitalize on a slowdown in BT.

An Openreach spokesperson said: “We expect to build ultra-fast full-fiber broadband to more homes and businesses next year, not fewer, so we’re speeding it up, not slowing it down.

“As our recent results show, we are spending £200m more on construction than we expected this year, and orders for Full Fiber services are at record levels. In fact, nine million homes and businesses can already order our Full Fiber service from a wide range of service providers, so it makes sense that we dedicate more resources to upgrading customers and fulfilling orders faster and more efficiently. fluid as possible.

We’ve also partially built the new network for another six million stores, so we’re focused on completing that work.”

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