BT promised a new era of ultra-fast internet speeds across Britain today, with a pledge to invest £25 billion in the next five years.
That should enable it to get fibre-to-the-premises, the fastest internet connection, to 25 million buildings by December 2026. That’s five million more premises than previously targeted.
The new targets will create 7000 jobs, and will chime with Prime Minister Boris Johnson, a fan both of big infrastructure deals and off better wi-fi.
Chancellor Rishi Sunak’s “super deduction” scheme that allows companies to cut their tax by 25p for every £1 they invest is a big part of BT’s incentive.
Chief executive Philip Jansen said: “Everyone is working together on this.”
To hit its targets, BT will have to get the ultra-fast wi-fi into 15,000 new premises every day – 25 every minute.
Philip Jansen, Chief Executive, said: "BT is already building more full fibre broadband to homes and businesses than anyone else in the UK. Today we are increasing our FTTP target from 20 million to 25 million homes and businesses to deliver further value to our shareholders and support the Government’s full fibre ambitions.
"This has three massive benefits: it allows us to go faster, beefing up our capacity to build fibre to households and businesses; it allows us to go further, getting fibre to more people including in rural communities, and; it will help fuel UK economic recovery, with better connectivity and up to 7,000 new jobs."
BT says it could reach a further five million premises through a joint venture with an external party. That would most likely be a financial investor rather than a rival telecom group.
It is pondering something similar for BT Sport, where a joint venture partner could provide the capital investment that BT needs for wi-fi spending.
For the year to March BT saw revenues fall 7% to £21.3 billion. Profits was down 23% to £1.8 billion. But the dividend to shareholders will be restored this year – it was cancelled in the midst of the worst of the pandemic.
Jansen notes that no-one at BT was furloughed or made redundant during Covid.
BT is looking for a new chairman, to replace the departing Jan du Plessis. Insiders played down talk that du Plessis and Jansen didn’t get along.
City analysts think the new chairman needs to be tech savvy. One analyst said: “He doesn’t need to be Steve Jobs. He or she does need to be really comfortable with technology.”
** BT has slashed its pension deficit to just less than £8 billion, a result for 300,000 scheme members.
Members in the “defined benefit” scheme are owed valuable pension promises, fulfilling them has been a long-term headache for the company.
Some straight forward cash payments from BT and other financial maneuvers – an asset backed funding deal – see the deficit down to £7.98 billion from £11.3 billion in 2017.
BT says the deal gives certainty to shareholders on future liabilities and to pensioners expecting income.
The BT fund has assets of £57 billion. Newer staff are in a less generous “defined contribution” scheme.