Don’t expect us to slow down
Despite inflation we're upgrading more customers than ever
With inflation hitting a 40-year peak and economic uncertainty dominating the news for weeks, you’ll be hard-pressed to find a business that isn’t feeling the pinch in the UK right now.
At Openreach, we’re no different.
Inflation’s affecting our business too. The cost of fibre-optic cables, telephone poles and the covers we put on inspection boxes have all risen this year – some by as much as 45 percent.
Prices for raw materials, transport and labour have all been climbing since Russia’s invasion of Ukraine and, of course, there’s the soaring cost of energy which is impacting the entire country.
But so far, we’re managing to minimise the impact of these rises on Openreach and our customers.
Our scale and buying power help us a lot, as do our long-term partnerships. We’ve got a strong mix of fantastic contract partners and 37,000 skilled engineering experts who work for us, so we can flex our operations to meet challenges like this.
We’ve also got R&D teams who are constantly developing new tools and techniques to help us keep costs down – like faster ways to dig trenches and clear blockages across our network.
But with all that said, it’s only rational that some people think we’ll delay investment and slow down our build programme.
So I’m here to say – that’s not happening.
I’m totally committed to building ultrafast, ultra-reliable full fibre broadband to 25 million UK homes and businesses by the end of 2026. And we’re going further and faster than any company out there.
This is nationwide engineering at an epic scale and I’m really proud of the Openreach team that’s gone from a standing start to reaching nine million homes and counting in just a few years.
We’re now building this life-changing technology to well over three million homes a year, and we expect to get to even more next year, not less.
That's faster than virtually any builder in Europe.
So we’re speeding up, not slowing down. But, more importantly, the demand for our new network is extraordinary.
More than 2.5 million customers have already chosen to upgrade with us, and we’ve seen record numbers of orders in the last three months from the service providers that choose Openreach.
We’re working closely with them and I’m expecting that record to be set frequently over the coming months, so we’re pivoting some of our resources to fulfil more customer orders.
We plan to upgrade people as quickly and smoothly as possible.
At the same time, we're focussed on ramping the build programme efficiently, without compromising on pace, safety and quality.
It’s fair to say we’ve got a bit ahead of ourselves on what we call “exchange enablement” - putting new equipment into our exchange buildings before we build out to homes and businesses.
That means we’ve ‘enabled’ or partially built the new network to around half of the homes in the UK already.
As a result, we’re going to pause starting some new jobs - like surveying work in other locations - for the rest of this year and we’re going to focus on completing work that’s already started.
It’s easy to misinterpret all this, but it’s about having financial discipline and getting a better bang for our buck.
All told, we’re investing much more than last year, and around £200 million more than initially forecast into our build this year - another example of us doing more, not less – and we’ve been able to do that partly thanks to Government support.
The super deduction scheme has rewarded companies like us who invest in new equipment or infrastructure by cutting their tax bill and it’s been a huge catalyst for building better broadband networks.
It would be good to see the scheme extended beyond April next year, as I’m confident it can continue to boost growth across UK.
The Centre for Economics and Business Research (CEBR) expects a nationwide full fibre network to create a more connected, productive and competitive economy - helping to increase remote working, bring people back into work, and level up the UK.
There’s potential for a £59 billion boost to productivity from all that, which is something I know everyone would welcome, especially at this point in time.
So don’t expect us to slow down – we’re building and connecting like fury.
Clive Selley, CEO Openreach