BT remains on course to build out its Openreach fiber network to 25 million premises by December 2026, as the UK telco giant also announced a satellite connectivity deal with Starlink.

The telco, which today (November 6) reported its financial earnings for the first half of the year to September 30, reported that during the first six months, it rolled out its fiber to a record 2.2 million premises.

It takes Openreach's total fiber footprint in the UK to 20.3 million premises.

Despite this, BT reported a decline of 242,000 Openreach broadband lines during Q2, which the telco stated was driven by losses to competitors and a weaker broadband market.

BT posted revenue of £9.8 billion ($12.81bn) for the first half of the year, down three percent year-on-year (YoY).

According to BT, this was due to declines in legacy voice, lower mobile handset trading volumes, and declines in BT's International unit.

As for the company's mobile offering, the carrier reported that its 5G subscription base now sits at 13.9 million in the UK, an increase of 11 percent YoY.

“BT is delivering on its strategy in competitive markets. We're building the UK’s digital backbone, connecting the country like no one else and accelerating our transformation," said Allison Kirkby, chief executive, Openreach.

"BT's transformation is delivering ahead of plan, as our UK focus and radical simplification and modernization are helping to offset declines from our International and legacy businesses and higher labor-related costs since the start of this tax year."

The telco also continued its push to drive cost savings, something that has been a key focus of Kirkby's strategy during her tenure. Earlier this year, Kirkby outlined plans last year to save a further £3bn ($3.92bn) in costs by the end of 2029.

Even prior to Kirkby's arrival at the telco, BT announced plans in 2023 to cut 55,000 jobs by the end of the decade, affecting its operations both in the UK and globally. This is set to reduce headcount at the company to 75,000 by 2030 from 130,000.

This number is now around 111,000, noted BT, down six percent YoY.

For the first half, BT reported £247m ($323m) in gross annualized cost savings and a cumulative total of £1.2bn ($1.57bn) in the first 18 months of the £3bn ($3.92bn) program.

"We remain on track to deliver our financial outlook for this year," added Kirkby.

A key part of her turnaround strategy has been to focus heavily on the company's home market in the UK, which has included planned sales in other markets.

In April, BT agreed to sell its Italian unit to Retelit. In September, BT finalized the sale of its Irish wholesale and enterprise business unit to Cordiant subsidiary Speed Fibre Group for €22 million ($25.36m).

But will BT get its fiber to 30 million?

Although Openreach's FTTH rollout drew record numbers for the quarter, and is on course to hit the 25 million milestone next year, the telco's long-term target of 30 million premises by 2030 could look less certain.

In a Financial Times interview this week, Clive Selley, chief executive, Openreach, said the business case for covering the additional five million homes would be undermined by Ofcom’s draft proposal for the next five-year regulatory period.

Such a proposal would retain restrictions such as price controls to limit Openreach’s dominance.

“I’m going to hold fire getting approvals for that final five million tranche [of homes] until I see what comes out of the TAR,” Selley told the FT. He was referring to Ofcom’s Telecoms Access Review, which is a five-year regulatory check-up of the market. 

“If I can’t see where the regulation is going to land then I can’t articulate the business case [internally] and therefore that business case goes on hold until we see the final wording,” Selley added.

Ofcom's previous review in 2021, led to the establishment of several new fiber providers, known as alternative network providers (altnets).

Competitors such as Virgin Media O2 and CityFibre have previously stated that Openreach holds significant market power, and that restrictions are necessary to level the playing field.

BT pairs with Starlink

In a busy day of BT announcements, the carrier also struck a satellite connectivity partnership with Elon Musk's SpaceX subsidiary, Starlink.

As part of this tie-up, Starlink will provide its satellite connectivity to BT and EE consumer broadband customers.

According to BT, the service will complement its existing fiber and mobile networks.

BT claims the deal to be the first of its kind in the UK, in which it notes that it will offer ultrafast, low-latency satellite connectivity to customers in rural and remote areas where traditional fixed-line infrastructure is economically unviable or tough to build.

The service is expected to be available in the latter half of next year.

Rival telco Virgin Media O2 signed a partnership with Starlink last week to expand its own rural network coverage in the UK.

"This landmark agreement with Starlink is a giant leap for rural connectivity – allowing us to get fast and reliable in-home connectivity to our customers in some of the UK’s most rural and isolated areas and to bridge the digital divide better than ever," said Kirkby.

Starlink notably has strong ties with T-Mobile in the US, helping the carrier to launch its nationwide satellite service. The company is estimated to have around 87,000 customers in the UK.