Openreach, BT’s fixed line subsidiary, said it can build its fiber footprint faster and at a lower cost than previously expected so it’s accelerating its original goal announced in March by five million. The company in March said it was planning to build fiber to 20 million homes by 2026. However, it has now raised that number to 25 million homes by 2026.
Openreach has currently connected about 4.5 million homes with fiber and believes it can now pass 4 million homes with fiber per year. The company also said it will invest $21.2 billion over five years to fund its fiber expansion, which is an increase from $16.8 billion that it originally proposed.
Openreach said that recent favorable regulatory rulings regarding the company’s wholesale pricing coupled with significant tax incentives and strong broadband demand all contributed to the decision to raise its goal. Parent company BT said it can fund the fiber expansion internally and still be able to invest in 5G and its other network modernization projects. However, the company also said it will explore a joint venture arrangement to help fund the additional 5 million homes and will start doing that in the coming months.
Investment firm Cowen said that Openreach isn’t the only U.K. company expanding its fiber footprint. CityFibre, which is building a fiber-based broadband network in the U.K., recently said it is raising an additional $1.4 billion to expand its fiber to an additional 2 million homes. The company plans to reach 10 million homes with fiber by 2025, up from its original goal of 8 million homes passed. Likewise, Giganet also recently announced that it has secured $355 million in funding to build a fiber network to connect more than 300,000 homes and businesses in southwest England. And Netomnia, another U.K. fiber provider, has partnered with infrastructure company Light Source to deploy fiber to 1 million U.K. homes by 2024.
Cowen also noted that the acceleration of fiber in the U.K. is good news for Adtran, which supplies Openreach with GPON gear and software. “We think ADTN is well positioned to win a portion of all of a number of or perhaps all of these opportunities,” Cowen said.