BT's delayed £10bn network upgrade should have taken a full decade to install, according to one of the telco's top executives.
Instead BT decided to try to complete the upgrade in just five years, due to the cost pressures of running its complex national networks.
The upgrade, which BT calls its 21st Century Network (21CN) will replace 16 national networks with one single IP network. BT originally said the project would be carried out between 2004 and 2009, but the completion date has since slipped back to 2011. This is the first time the telco has admitted that the programme should have taken 10 years.
Speaking at the DigiWorld Summit in France, Paul Reynolds, the chief executive of BTWholesale and one of the most powerful men behind the project, said that under BT's "normal" timescales the upgrade would have taken 10 years.
Insisting that 21CN can and will be completed in five years, Reynolds said, "It is an enormous programme. When we ran that through our normal timescales, the answer came back after many iterations twice as long as we're currently going for. Everyone said: if you try to go any faster you're taking too much risk, it can't be done."
But Reynolds said that 21CN must be completed as a matter of urgency, so the telco can stop spending money on 16 separate networks.
"Meanwhile [during 21CN's deployment] you still had 16 old platforms accumulating cost. The business case is bust. So the economics said we had to do it within five years. So we worked backwards, from the angle of five years, rather than forwards from our conventional speeds. Our folks have stepped up to it."
The telecoms industry has reacted negatively to BT's recent admission that 21CN won't be finished until 2011. In an interview with ZDNet UK published on Tuesday, Terry Matthews, the Welsh billionaire and serial enterpreneur said, "I'm disappointed. You've got to question whether BT picked the right vendors."
Neil Armstrong, product development director at PlusNet, an ISP which is a customer of BTWholesale, is frustrated because the delays in 21CN will also delay the rollout of super-fast broadband access, known as ADSL2+.
"It's frustrating that BT Wholesale can't match the timescale of the LLU providers," Armstrong told ZDNet UK earlier this month
Reynolds also revealed that BT had abandoned its trials of fibre-to-the-home. At the same time that it started designing 21CN, BT commenced trials of fibre access for homes and businesses. Had the trials been successful, users across the UK would have gained speeds of up to 100Mbps to their premises.
But Reynolds revealed, "We have worked extensively on the operational testing and deployment of fibre: fibre to the cabinet and fibre to the home. But for widespread fibre deployments, I've yet to see a business case that pays for the deployment. We have an architecture that supports fibre. BT's position on that is that we are using it in greenfield sites. But on the copper-replacement strategy, the incremental revenues for massive investment are not immediately apparent."
Reynolds added that BT would offer fibre-to-the-home or business only if other carriers demanded it from the telco. He said ADSL2+, which will be rolled out at the same time as 21CN, will provide sufficient bandwidth instead.
The chief executive added that BT expects to realise its projected cost savings from 21CN of £1bn a year from financial year 2008/2009, saying that cost savings would rise from then on. Despite the delays, he also said that 21CN would be completed on budget, which BT says is £10bn.
BT will also meet its estimated date for the first migration to its new IP networks, albeit only just. Five-hundred users in Cardiff will be migrated to 21CN on the night of Monday 27 November.