BT Group plc is aggressively advancing its full-fibre strategy, placing network infrastructure at the heart of its long-term growth plan. In its half-year results for the period ending 30 September 2025, the telecommunications company confirmed that its Openreach unit had reached more than 20.3 million premises with fibre-to-the-premises coverage. This includes 5.5 million rural homes and businesses, underscoring BT Group’s strategic pivot toward digital infrastructure on a national scale.
Chief Executive Allison Kirkby highlighted the milestone as a central pillar of BT Group’s ambition to be the United Kingdom’s most trusted digital connector. Openreach aims to reach 25 million premises by December 2026, and a 38 percent FTTP take-up rate indicates growing commercial traction. The broader industry context suggests that the race is not simply about whether fibre will dominate the market, but about how quickly BT Group and its competitors can scale, differentiate, and monetise their offerings.
Rival telecommunications providers, infrastructure investors, and policy stakeholders are now watching this transformation closely. The evolution from legacy copper and hybrid broadband to fibre connectivity is becoming one of the most strategically significant changes in the UK’s telecom sector.
Why are Openreach’s FTTP milestones critical in the battle for market leadership and customer retention?
The fibre strategy led by BT Group is beginning to show material results. Openreach added 2.2 million new premises to its network in just six months and recorded 1.1 million new connections during the same period. Its total base of connected fibre customers now exceeds 7.6 million. With a take-up rate of 38 percent, the infrastructure unit is outperforming several European peers and moving closer to its long-term target range of 40 to 55 percent.
The company reported a 4 percent increase in average revenue per user for Openreach broadband services, bringing the figure to £16.70. This growth reflects higher-speed plan adoption and CPI-linked price adjustments. BT Group also reported that its fibre footprint includes a significant rural component, which aligns with national digital inclusion priorities and strengthens its position with regulators and policymakers.
On the retail side, fibre uptake is also rising. The Consumer unit added 476,000 new FTTP subscribers, while the Business unit added 44,000, bringing the combined retail base to 4 million fibre customers. The company continues to target between 6.5 million and 8.5 million retail FTTP connections by 2030. Analysts and institutional investors view the Openreach monetisation pathway as a critical driver of future value creation for BT Group, especially given its high wholesale take-up and reliable cash flows.
How are UK telecom rivals responding to BT Group’s aggressive FTTP rollout, and what competitive pressures are emerging?
Virgin Media O2 is accelerating its own fibre upgrade programme using XGS-PON technology. The company is aiming to deliver full-fibre connectivity across the United Kingdom by 2028. It is also expanding wholesale partnerships to compete with Openreach in both urban and suburban areas.
CityFibre, a major alternative network operator, has passed more than 3 million premises and is targeting 8 million by the end of the decade. However, CityFibre and other smaller fibre operators face headwinds including network overbuild, rising capital costs, and uneven access to wholesale partners. Many of these players are now facing increased pressure to consolidate or pivot their strategies.
Hyperoptic, Community Fibre, and similar providers continue to focus on multi-dwelling units and dense metropolitan areas. However, their limited national reach means they cannot yet rival BT Group’s rural coverage or vertical integration. Meanwhile, BT Group has entered a landmark agreement with satellite broadband provider Starlink to further improve rural connectivity. This hybrid model could pose a challenge to fibre-only players in difficult-to-reach regions.
In terms of customer value, BT Group continues to bundle fixed and mobile services. The company reported a fixed-mobile convergence rate of 25.9 percent among Consumer customers, up from 23.1 percent a year ago. Broadband average revenue per user fell by 1.4 percent to £41.90, and mobile postpaid ARPU declined by 1.6 percent to £19.30. These figures suggest short-term pricing pressure but support a long-term bundling strategy that competitors may find difficult to replicate.
What regulatory and structural dynamics could influence the future of UK fibre competition?
BT Group’s scale and wholesale dominance through Openreach are under constant regulatory oversight. Ofcom continues to assess the neutrality of Openreach’s wholesale pricing framework, particularly under the Equinox 2 scheme. While the current pricing model attempts to balance Openreach’s commercial interests with fair market access, regulatory adjustments could shift the playing field in the years ahead.
The question of structural separation between Openreach and BT Group remains a background concern. While the legal separation model has so far satisfied regulators, further consolidation in the fibre market or future overbuild risks could reignite discussions around full operational separation or more aggressive wholesale pricing interventions.
The government’s Project Gigabit programme also plays a critical role. BT Group has secured multiple rural rollout contracts under this scheme, but smaller providers continue to push for more equitable distribution of subsidies and clearer access terms. As full-fibre becomes a baseline utility, not just a premium option, government policy will increasingly shape who wins market share and who is left behind.
How does BT Group plan to monetise fibre at scale, and what challenges remain in driving profitability?
BT Group is making clear progress in reshaping its cost base in parallel with infrastructure expansion. Labour costs have been reduced through a 6 percent workforce reduction, bringing total headcount to 111,000. Network energy consumption declined by 5 percent year-on-year, and Openreach repair volumes dropped by 13 percent, reflecting lower maintenance requirements for fibre networks compared to copper.
The company’s £3 billion transformation programme has now delivered £1.2 billion in cost savings across its first 18 months. These structural efficiencies are expected to support future margin growth. Nevertheless, free cash flow for the half year was down 43 percent to £408 million. The decline was attributed to higher capital expenditure, the absence of a prior-year tax refund, and reduced working capital inflows.
Capital expenditure rose 8 percent to £2.44 billion, largely due to increased fibre build activity. BT Group expects capital intensity to peak in FY26 and to decline by more than £1 billion thereafter. It has reiterated its mid-term financial goals, targeting £2 billion in normalised free cash flow by FY27 and £3 billion by the end of the decade. Achieving these targets will require continued take-up momentum, stable pricing, and disciplined cost management.
Net debt rose to £20.9 billion, up from £19.8 billion in March 2025, primarily due to pension contributions and dividend payments. While BT Group’s debt remains investment-grade, the high leverage level could limit financial flexibility if free cash flow recovery is delayed.
What is the broader outlook for the UK fibre market through 2030 and beyond?
The transition to full-fibre broadband is reshaping the United Kingdom’s telecommunications landscape. BT Group’s national coverage, deep rural reach, and wholesale leadership make it the most influential player in this transformation. However, the competitive field remains active, with Virgin Media O2 scaling its fibre presence and multiple AltNets trying to carve out regional or specialised niches.
Consolidation among AltNets is likely to accelerate. Rising financing costs, increasing build duplication, and declining returns from isolated networks could push many smaller operators toward mergers or exits. Meanwhile, regulatory scrutiny of Openreach’s position will remain a constant variable.
BT Group appears to be moving into a phase where scale is less about build metrics and more about monetisation, retention, and convergence. The broader market will be shaped not just by who builds the most fibre but by who can turn that fibre into sustained, diversified earnings across wholesale, business, and consumer verticals.
As full-fibre becomes the default mode of connectivity, the competitive advantage will shift from physical infrastructure to service quality, bundling capabilities, and long-term customer engagement. BT Group’s early lead may prove decisive, but only if it can continue to execute across financial, regulatory, and operational dimensions.
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