BT to enhance Capex targeting 5G network and FTTP

BT today said its capital expenditure (Capex) for this year will increase to between £4 billion and £4.3 billion.
BT CEO Philip Jansen on Huawei
The telecom group deployed 5G in 100 towns and cities.

“As we accelerate our FTTP build, and continue to invest in 5G and the modernisation of BT, we expect Capex for this year to increase to between £4bn and £4.3bn. We expect this to result in normalised free cash flow in a range of £1.2bn to £1.5bn.

Capital expenditure was £927 million in the June quarter of 2020 as compared with £931 million in the same period last year.

BT said network investment was £526 million (+2 percent) reflecting investment in FTTP deployment.

BT spent £204 million on customer-driven investments, £170 million on systems and IT, and £27 million on non-network infrastructure.

Ofcom has indicated that bidding in the upcoming auction of 700MHz and 3.6GHz spectrum in the UK will be in November 2020 at the earliest. BT expects to participate in the auction to support its 5G leadership position.

“We reached an important milestone with 3m FTTP premises passed, welcomed Ofcom’s consultation on our rural FTTP build proposal, and have now deployed 5G to 100 towns and cities,” BT Group CEO Philip Jansen said.

Complaints to Ofcom about BT broadband fell by 44 percent to an all-time low, remaining below the industry average for three consecutive quarters. EE won all seven Rootmetrics’ awards for UK-wide mobile network performance in the first half of 2020.

In July, the UK Government announced a revised set of proposals to remove Huawei
equipment from 5G communication networks in the UK by the end of 2027, and consult on the future use of Huawei in FTTP networks.

BT currently estimates that full compliance with these revised proposals would require additional activity, both in removing and replacing Huawei equipment from its existing mobile network, and in excluding Huawei from the 5G network.

It is estimated that these costs can be absorbed within the initial estimated implementation cost of £500 million, as reported in Q3 2019-20 trading update.

BT said it will work with authorities as they consult on the future procurement strategy for fixed networks.