BT has announced what it describes as “the UK’s biggest communications infrastructure investment in a generation”. Philip Jansen, Chief Executive, commenting on the telco’s Year End results, said that BT had risen to the challenge of the coronavirus crisis, keeping the nation and the NHS connected, standing by its customers and supporting the most vulnerable in society. “Recent weeks have shown how vital it is to develop next generation digital infrastructure. That’s why we’ve set out a new target to invest around £12 billion [€13.8bn] to build full fibre broadband for 20 million premises right across the UK, including rural areas, by the mid- to late-2020s. Combined with our leadership in 5G, this is a sound long-term investment that will drive the UK’s economy for years to come,” he asserted.
After passing 1.3 million premises in 2019, BT is aiming at over 2 million in 2020/21, and envisages a maximum build rate of 3 million premises per year. “Our FTTP investment should deliver pre-tax nominal returns of between 10 per cent to 12 per cent and is based on a regulatory framework consistent with Ofcom’s preferred policy direction and continued support for infrastructure investment and competition,” he stated.
“BT is delivering, but is also changing. BT needs to be leaner, simpler and more agile. Today we are announcing a radical modernisation and simplification programme that will use technology to create a better BT for the future. This five-year initiative will re-engineer old and out of date processes, rationalise products, reduce re-work and switch off many legacy services. This next stage in the modernisation of BT will deliver gross annualised savings of £2 billion over the next five years,” he suggested.
“In order to deal with the potential consequences of Covid-19, allow us to invest in FTTP and 5G, and to fund the major five-year modernisation programme, we have also taken the difficult decision to suspend the dividend until 2022 and re-base thereafter,” he revealed.
“These decisions, particularly on the dividend, network investment and transformation are key to underpinning BT’s investment case; driving network strength, competitive strength and financial strength, providing more clarity to the market, and driving long-term value for shareholders. I am confident that these decisions position us really positively for the future,” he concluded.