Openreach cuts UK superfast broadband

Openreach plans to limit its investment in superfast fiber broadband rollouts as BT pushes ahead with major cost-cutting.

The telecoms giant’s network division has contacted suppliers to say it would build the network “narrower and deeper” and tighten time frames, according to a letter seen by the company. Financial Times.

“This will necessarily involve the cancellation or suspension of employment you have received and/or confirmed,” the letter said. “It is clear that there will be a financial impact on you as we implement these plans.”

It comes after the FTSE 100 company announced a new cost-cutting target from £2.5bn to £3bn by the end of 2025 due to inflationary pressures.

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

The company saw energy bills rise by £200m this year and continued pressure from the Communications Workers’ Union (CWU) strike action.

Boris Johnson’s government promised to “even out” the nation by providing next-generation broadband to most homes by 2025, hoping to tackle rural disadvantage.

The decision to limit expansion plans could work in favor of major rivals such as Virgin Media O2, who could potentially take advantage of BT’s slowdown.

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

“As our recent results show, we are investing £200m more than we expected this year in construction 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 providers, so it makes sense for us to put more resources into upgrading customers and fulfilling orders as quickly and efficiently as possible.

We have also partially built the new network for an additional six million homes, so we are focused on completing that work.”

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