Openreach to limit investment into ultrafast fibre broadband rollout

23rd Nov 2022 10:55

(Sharecast News) - Openreach will limit its investment into the rollout of ultrafast fibre broadband across the UK as BT's networking unit looks to cut costs and get more "bang for its buck" as Britain continues to combat a red-hot inflationary environment.

Openreach has told suppliers that it will now build its fibre broadband network "narrower and deeper" and "tighten the timing of investment" by not committing capital to projects more than six months out, according to the Financial Times.

"This will by necessity include an element of cancellation or suspension of a job you have received and/or validated," said BT. "It is clear that there will be a financial impact to you as we implement these plans."

BT's move to limit investment comes just weeks after chief executive Philip Jansen revealed the telecommunications giant will raise its cost-cutting target from £2.5bn to £3.0bn by the end of 2025 amid heightened inflation. "Everyone is going to have to share the pain on cost savings," said Jansen.

Openreach CEO Clive Selley also noted that BT will now focus more on completing fibre networks in areas that were already partially complete as opposed to breaking new ground, according to the FT.

However, Selley added that this would not affect Openreach's target of providing 25.0m UK homes with full fibre by 2026 - which is expected to cost the group approximately £12.0bn.

As of 1050 GMT, BT shares were up 0.20% at 125.05p.

Reporting by Iain Gilbert at Sharecast.com