Telecom

BT to bankroll super-fast broadband

Alice on Jul 15, 2008

Tags: Super-fast Broadband

BT today announced its plans to invest £1.5 billion in fibre-optic, super-fast broadband. The programme aims to deliver the service to up to 10 million homes by 2012, and will include speeds of up to 100 Mb/s.

Although BT had recently expressed doubt regarding the investment, Ofcom’s promise to ensure lucrative margins seems to have offered sufficient security.

Ian Livingstone, BT Chief executive has said in a statement:

“Broadband has boosted the UK economy and is now an essential part of our customers’ lives. We now want to make a step-change in broadband provision which will offer faster speeds than ever before. This marks the beginning of a new chapter in Britain’s broadband story”.

The new super-fast broadband promises to transform the way we use the web. As Livingston explains:

“Fibre-based super-fast broadband will allow users the ability to run multiple bandwidth shredding applications simultaneously. Online gaming, watching iPlayer and downloading movies in tandem is a distinct possibility. Holographic video conferencing will become commonplace.”

BT have announced that they plan to open up the fibre network to other internet service providers, however the company must be “allowed to make a reasonable return on that investment”, a spokesman has said.

BT today made the further announcement that “Given the strategic priority of this planned investment” it would be suspending its current share buyback scheme effective of 31 July. Livingston told Journalists today: “It will give us the flexibility to announce these types of investments.”

Ofcom has welcomed the decision by BT, and will continue to encourage investments from other operators. “This is a clear sign that the UK market is moving in the right direction, with a growing number of plans to deliver super-fast broadband services to consumers” said Ed Richards, CEO of Ofcom.

Ofcom will be publishing further detailed proposals for the regulation of Next Generation Access networks in September.