BT aims cost cutting amid major 5G and FTTP network expansion

BT CEO Philip Jansen has set new FTTP targets and cost reduction plans, without revealing Capex and revenue targets.
BT CEO Philip Jansen on HuaweiExpansion

BT aims to accelerate FTTP build with a target of 20 million premises passed by the mid- to late-2020s.

BT’s FTTP network covers 2.6 million premises. FTTP network covered an additional 1.3 million premises in fiscal 2019-20. BT said its FTTP network will cover an additional 2 million in 2020-21. BT’s aim is to achieve a maximum build rate of 3 million premises per year. FTTP investment should deliver pre-tax nominal returns of between 10 percent to 12 percent, BT said.

BT said the number of 5G subscribers continues to grow in line with expectations. But BT did not reveal its subscriber base on 5G network.

BT’s 5G network covers over 80 towns and cities. BT will be investing significantly in 5G mobile network to more than double current footprint by March 2021 subject to the right conditions.


Capital expenditure of BT was £3.96 billion vs £3.963 billion, driven by network and customer investment. The main focus of BT was investment in Fibre Cities network build and the rollout of 5G. Other capital expenditure components were up 6 percent with £972 million spent on customer-driven investments, £755 million on systems and IT, and £163 million on non-network infrastructure.

Cost cutting

BT announced modernisation and simplification programme that will use technology to create a better BT.

BT said its next phase of modernisation aims to deliver annualised gross benefits of £1 billion by March 2023 and £2 billion by March 2025, with £1.3 billion one-off cost to achieve in total across the five years. BT will deliver gross annualised savings of £2 billion over the next 5 years.

This 5-year initiative will re-engineer out of date processes, rationalise products, reduce re-work and switch off many legacy services.

BT will focus on simplifying product portfolio, simplifying and automating customer journeys, moving to a modern, modular IT architecture, and migrating customers from legacy networks to modern FTTP and 5G networks.

The savings will comprise reductions in both total labour costs and spend with external suppliers. BT expects around 80 percent of the savings will be realised in operating costs and the remainder in capital expenditure.

BT today said it has completed its cost transformation programme — announced in May 2018 — with an annual benefit of over £1.55 billion and an associated implementation cost of £670 million.

Indication of job cut?

BT did not announce any job cut. BT today revealed that it has slashed 5,000 jobs in 2019-20. The total job reduction in the last two financial years was 9,000.


BT reported 2 percent drop in revenue to £22.905 billion, mainly reflecting the impact of regulation, declines in legacy products, strategic reductions in low margin business and divestments.


BT invested in digital solutions, with around 20 percent of all BT Consumer transactions processed through digital channels. My BT registrations rose 39 percent to 4.4 million and MyEE registrations grew 6 percent to 12.6 million.

Baburajan K