Press Releases (228)

PLANNED REFORMS OF OPENREACH REQUIRED AS NEW REPORT HIGHLIGHTS BT EXCESS PROFITS INCREASED

  • BT’s excess profits from regulated services increased to more than £1 billion in last financial year
  • It is now estimated that BT’s excess profits stand at £9.7 billion since 2005
  • BT made excess profits of around £95 from each of its 1.8m rural broadband customers last year

Vodafone UK believes Ofcom’s move to enforce the legal separation of Openreach from BT is required as a new report from Frontier Economics, a leading economic consultancy, reveals that BT’s excess profit increased by 28% to more than £1 billion in the last financial year.

Vodafone UK’s Director of External Affairs Helen Lamprell, said: “We, along with broadband customers across the country, share Ofcom’s disappointment at BT’s performance and at its reluctance to undertake the transformation necessary to ensure the UK has the competitive fibre networks it needs for the future. We will analyse the detail of what Ofcom proposes – and BT’s response to those details – very carefully.  We believe Openreach should be separated from BT as soon as possible, so BT’s customers and other providers can be better protected from the excessive charges highlighted in this Frontier report.”

Commissioned by Vodafone UK, the Frontier report also shows that BT made returns of 70% from the regulated wholesale broadband services used by around 1.8 million customers living in rural parts of the country, where it faces little or no network-based competition. This means rural customers, who make up 9.5% of UK homes and businesses, provided BT with average excess profits of £93.84 per customer per year.

The excess profit of £1.078 billion made by BT in the financial year ended March 2016 equals the amount the UK Chancellor set aside in the Autumn Statement for ‘full-fibre’ broadband and trials of 5G mobile communications[1]. Updating the Frontier analysis in line with Ofcom’s corrections made in 2015 means BT’s excess profits are now estimated at £9.7 billion since the financial year 2005/2006.[2]

Helen Lamprell continued: “It beggars belief that BT felt it could increase its excess profits at this time and further underlines the need for an independent Openreach. We believe Openreach needs to be a stand-alone business headed by a truly independent Board of Directors bound by statutory duties to treat customers equally and give a true and accurate view of Openreach’s underlying assets, costs and profits. Only then would it be a simpler and more transparent business for Ofcom to regulate.”

 

Notes to editors:

Frontier Economics analysis uses BT’s own financial statements and is based on Ofcom’s methodology governing what BT divisions – Openreach and BT Wholesale – can charge for regulated wholesale services. It compares the level of profitability for BT’s regulated services, expressed as a return on capital, against Ofcom’s estimate of BT’s cost of capital.

Other points Frontier make include:

  • BT’s return on wholesale fibre services (Virtual Unbundled Local Access), used to supply consumer Fibre-to-the Cabinet (FTTC), jumped to 22% from 14% over the last year; and
  • BT made returns of more than 23% on high-speed business lines (Ethernet and traditional leased lines). Despite new price controls, BT will continue to make profits well above its cost of capital on these business lines until 2019. In 2015/2016, BT’s returns on these products were 50% in London – a market which had been partially de-regulated.

[1] https://www.gov.uk/government/topical-events/autumn-statement-2016

[2] https://www.ofcom.org.uk/__data/assets/pdf_file/0025/84814/bt_cost_attribution_review_second_consultation.pdf

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SCIENTISTS SUCCESSFULLY LOG INTO MARINE SMARTPHONES WORN BY HARBOUR SEALS

Scientists have successfully completed the first stage of a Scottish Government-funded, multi-year study into the possible causes for the rapid decline in Harbour seal populations in Orkney.  An essential part of this study uses the latest marine smartphones connected to Vodafone UK’s ‘Internet of Things’ technology.

The smartphone component of this study was conducted between April and August this year.  It involved scientists at the Sea Mammal Research Unit (SMRU) – part of the University of St Andrews and funded by NERC (the Natural Environment Research Council) – harmlessly gluing their unique marine telemetry tags to the fur of ten harbour seals; one of two species of seal in the UK.

The tags have now dropped off the seals following their annual moult but not before they transmitted information over the Vodafone network directly back to SMRU on the seals’ behaviour and movements. The data is now being thoroughly analysed to help determine why harbour seal populations have declined in some Scottish regions, for example, 76% in Orkney since 2000, and up to 90% in other areas of northern and eastern Scotland.

To date, the data has provided SMRU with an invaluable 3D representation of each animal’s activity.  This remarkable and detailed insight into the secret lives of these seals allows SMRU scientists to:

  • Identify the seals’ feeding areas at sea and to characterise what makes these areas special;
  • Thus identify where to collect water and food samples, which may hold the key to regional declines. This could offer an insight into whether the seals are exposed to toxins from harmful algae blooms;
  • Determine which haul-out sites the seals use when they rest on land. This has guided SMRU’s photo-identification effort aimed at assessing the long-term breeding status and survivorship of females identified by their unique fur markings; and
  • Understand the rate of interchange of seals between Orkney and the Scottish mainland. Quantifying this connectivity of seals between regions helps inform appropriate seal conservation plans.  In this study, one of the ten tagged seals moved to the mainland.  Another travelled 100 km south to the Moray Firth, and then back again to Orkney.

SMRU’s Deputy Director Dr Bernie McConnell said: “Over the last 15 years, many of the harbour seal populations in the Northern Isles and on the north and east coasts of Scotland have been declining.  Marine data collected during this project on Orkney is helping to assess the causes, and possible mitigation options, in relation to the harbour seal decline. This is just the start and we will be analysing the data further before presenting the findings to Scottish Government.”

Vodafone UK’s Corporate and External Affairs Director Helen Lamprell added: “We are keen to break down technological barriers so that government, the scientific community and the private sector can work together in order to ensure we have the best informed policy decisions for the environment. Vodafone has a long-history in extending mobile coverage across the world, especially in developing countries and helping the most vulnerable of people, but we also want to go back to our roots in the UK and help protect one of the things our society cherishes – our sea – and the bio-system it supports.”

Note to Editors

A video of the system in action can be found here.

About SMRU

The Sea Mammal Research Unit is based at the Gatty Marine Laboratory at the University of St Andrews and is funded by NERC (the Natural Environment Research Council).

SMRU’s in-house engineering Instrumentation Group (SMRU-IG) developed the world’s first data capture and relay tags in 1982 and has progressively improved their design and functionality for SMRU’s own use in the UK and by similar research establishments elsewhere in Europe, North and South America, Asia and Australia.  A marine smart tag, connected to Vodafone’s global M2M platform, is lightweight, no larger than a mobile phone, but can withstand depths of up to 500 metres.

 The acknowledged international expertise of Marine Science at St Andrews has led the University to commence a fundraising appeal for a new flagship building, seeking a £9.6m investment to provide a new aquarium and research facility in the East Sands at St Andrews.

 

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WE’VE BEEN NAMED THE UK’S NUMBER ONE NETWORK FOR VOICE - BUT WE’RE NOT STOPPING THERE

WE’VE BEEN NAMED THE UK’S NUMBER ONE NETWORK FOR VOICE – BUT WE’RE NOT STOPPING THERE

By Kye Prigg | Head of Mobile Networks, Vodafone UK

At Vodafone, we want nothing more than for people to love using our network. We want customers to be confident in using it wherever they go, to never experience call drops, and to have fast data there in their pocket whenever they want to use it.

To that end, our network is now officially the biggest and best it’s ever been – with over 5,000 mobile sites 4G-enabled in the last year alone, providing 96% 4G UK population coverage – but we know that it only matters to our customers when they hardly notice it: mobile signal is at its best when its working quietly in the background of their daily lives, after all.

P3, one of the world’s leading independent mobile network testing companies, has recently reported we are the best for voice performance nationwide which means we are connecting calls quicker and with greater reliability than any other provider. We’ve also been named joint first for our overall network across the UK and the number one network in London for the second year in a row. You can find out more here.

But we’re always looking to improve our network in a number of different ways. Our first and highest priority? Pushing ahead with ‘Project Beacon’.

Out with the old, in with the new

Project Beacon is a full upgrade of our entire network, replacing old 2G and 3G equipment on masts with fully modernised 2G, 3G and 4G technology, which completely changes the customer experience when it comes to voice and data usage. At the same time we’re also modernising the antennas and power systems and, at some sites, bringing in a high capacity fibre or microwave backhaul of up to 1GBps, to really future-proof our customers’ data speeds.

When we bring new technology to each site we actually bring new spectrum too. We started our 4G roll out installing 800MHz spectrum at our sites, which gives us really good coverage indoor and out. However, on a lot of these sites we have also deployed our new 3G 900MHz and 2100MHz spectrum – the 900MHz in particular brings a more robust voice experience for our customers.

We’re not forgetting about rural communities though, for whom we know mobile coverage can be a big issue. Our Rural Open Sure Signal programme has brought 3G coverage to 84 rural communities from the Shetlands to Cornwall.  We’ve also launched our new Community Indoor Sure Signal initiative which is doing the same for community hubs, such as village stores and pubs.

Jumping the mobile hurdles

As with any network upgrades there are a number of challenges in providing our customers with the best possible mobile network. The first, and arguably the biggest, is around site acquisition – that’s agreeing with landlords or site operators about what we want to do, and then getting the right access to do it. The second part of that is bringing the backhaul (the technology which connects masts to our core network) into the sites, which can take many, many months to do.

To help keep things smooth while that happens, we do a lot of preparatory work to make sure that the downtime of each base station (a mast and its associated equipment) is kept to a minimum – particularly in smaller towns and villages, where there is often only one site in the area to minimise the impact for our customers.

Another challenge is in the performance optimisation of the network. Once we’ve acquired a site and brought in new transmission technology – or built a new site – we need to optimise it so that it works seamlessly with all other sites in the area. A huge amount of time and work goes into that. We’ve got teams all over the country whose job is to take care of all the planning, design and optimisation of the radio equipment, but it’s a never-ending task because each time we bring a new base station live it changes the environment surrounding it.

The reason for that is simple. Wherever you have a cluster of old sites and you bring a new Beacon site live, it changes or affects everything around it. You then have to optimise all the legacy base stations nearby, and, as you change or upgrade each one, it’ll alter both the other old sites and the beacon one you’ve just upgraded.

As a result, we constantly have to monitor each and every cell, change the orientation of the antennas, alter their power outputs and shift the parameters which help people’s phones move effectively from site to site.

But, as the P3 results highlight, all that hard work is paying off. We’re now carrying two thirds of our voice traffic nationwide on our 3G network, which is more robust than 2G, and in the cities that number hits around 90 per cent. Likewise, more than two thirds of our data traffic is carried on 4G, not 3G, which is providing higher speeds for everyone.

As it stands, we now have over 90 per cent population coverage. The aim for the programme is that we upgrade around 400 new base stations every month, and we’re aiming to be complete the work in December 2017.

And with that being the case, we’re now starting to look at what we can do after Project Beacon is complete. Moving forwards, we can add even more capacity to our sites, either with new spectrum or advanced features and techniques MIMO; roll out more and more small cells which can bring coverage where there is none; and really start to get excited about 5G.

Ultimately, it’s very important for us that we’ve got people covered wherever they are. Things may not always move as quickly as everybody would like, but we’re working very hard and investing billions to make the Vodafone network the very best it can be.

 

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