BT customers who receive an upgrade to their broadband speeds could have an unlikely rival to thank – Vodafone. That’s because Vodafone CEO Nick Read has openly spoken about considering plans to invest in BT’s £15 billion roll-out of gigabit-capable broadband across the UK.
BT’s Openreach, which installs and maintains the internet infrastructure used by BT, EE, Sky, TalkTalk, Shell Energy, Vodafone and more, hopes to connect 25 million premises to future-proofed full-fibre broadband by December 2026. With fewer than 5 million homes already connected to its gigabit-capable connections right now – compared with almost 16 million from rival Virgin Media – BT is well aware that it might need some help to achieve its lofty goal.
Although BT initially pledged to reach 20 million premises by 2026, that target was increased by an extra 5 million earlier this year. If the company succeeds, it will have connected 80 percent of the UK with broadband infrastructure capable of delivering speeds of up to 1,000Mbps. Compared to the current UK average broadband speed of 80Mbps, that’s a serious upgrade.
Announcing the additional five million connections, BT said it could “deliver further shareholder value by funding the additional 5m premises through a joint venture with external parties”. And one of those external parties looks set to be Vodafone, which does not currently own any full-fibre network.
The mobile carrier also missed out on the opportunity to merge with the UK’s most expansive full-fibre broadband network, owned and operated by Virgin Media. While the company was open to offers, mobile carrier O2 got their first. With the £31 billion merger now approved by regulators, O2 has access to a vast full-fibre broadband network, while Virgin Media owns its own 4G and 5G masts (something it has always paid Vodafone to access).
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Speaking to The Telegraph about the next moves for the company, Vodafone CEO Nick Read said: “We are actively engaged with Openreach to understand their plans and what they are looking at, but we will explore with many players – not just BT.”
It’s unclear exactly what Vodafone gains from the deal. The company already uses Openreach’s infrastructure and will benefit from full-fibre broadband as soon as the BT-owned brand completes the upgrades. Aside from boosting the roll-out to an extra five million homes, which might not otherwise happen, it seems a little one-sided.
Interestingly, Vodafone was an early backer of CityFibre, which is currently pushing ahead to become the third biggest broadband infrastructure supplier in the UK, with plans to connect 10 million homes. Whether Vodafone is planning any further investment in the Openreach competitor remains to be seen.