BT Plots G.fast Rollout, Mobile Launch
BT has announced plans to run large-scale trials of G.fast, the next-generation fixed broadband technology, this summer and said it looked forward to launching converged services following the acquisition of mobile operator EE. The news came early Friday morning as the UK incumbent reported an increase in profit on declining revenues in the October-to-December quarter.
The UK fixed-line incumbent plans to make broadband services of up to 500 Mbit/s available to most of the population during the next 10 years using the G.fast standard.
The technology works by supercharging the copper connections into customer homes and would be a much cheaper way of providing higher-speed services than building a costly fiber-to-the-home network. (See G.fast G.ets G.reen Light.)
Trials this summer will take place in the towns of Huntingdon in Cambridgeshire and Gosforth in Newcastle.
Last September, BT Group plc (NYSE: BT; London: BTA) claimed to have recorded download connection speeds of 800 Mbit/s during G.fast trials at its Adastral Park, UK facility and said it would carry out further trials with G.fast vendors Adtran Inc. (Nasdaq: ADTN), Alcatel-Lucent (NYSE: ALU) and Huawei Technologies Co. Ltd. (See BT Takes a Step Closer to G.fast.)
BT also expressed confidence it would reach a "definitive agreement" with EE parent companies Deutsche Telekom AG (NYSE: DT) and Salt SA on a takeover of the mobile operator, which operates the country's biggest mobile network in terms of customer numbers.
The former state-owned monopoly offered £12.5 billion ($18.8 billion) for EE in December and said today that an acquisition would allow it to provide services combining fiber broadband, WiFi and 4G technologies. (See BT Offers $19.5B to Buy EE.)
Even so, the operator made clear that failure to conclude an EE deal would not derail its efforts to re-enter the UK mobile market, indicating it is already at work on developing fixed-mobile converged services for businesses and consumers.
BT quit the UK mobile market when it spun off its BT Cellnet mobile business in 2002 (that company is today owned by Spain's Telefónica SA (NYSE: TEF), operating under the O2 brand), but its interest in getting back into mobile became apparent when it picked up 2.6GHz spectrum during the government's 4G auction in early 2013.
Earlier today, the operator reported a 12% year-on-year increase in profit before tax during its third quarter, to £694 million (US$1.05 billion), even though revenues were down by 3%, to £4.48 billion ($6.75 billion), over the same period.
BT blamed the sales decline mainly on a fall in transit revenues as well as the impact of foreign exchange movements. The take-up of fiber broadband services fueled a 7% increase in revenues at BT Consumer, to £1.08 billion ($1.63 billion), but revenues fell at all of the operator's other major business divisions.
BT Global Services , meanwhile, saw revenues drop by 8% because of foreign exchange movements and a fall in sales to the public sector.
BT is guiding for flat revenues this year, compared with its last financial year, but expects to see top-line growth in 2015/16.
The operator's share price fell by more than 1.5% on the London Stock Exchange after publication of its results.
— Iain Morris, , News Editor, Light Reading