Telco to stump up extra £1bn to fund bigger fibre footprint...
BT is to expand its fibre broadband footprint in the UK - investing an additional £1bn to take coverage to around two-thirds of the nation by 2015.
Just under two years ago, the telco announced it would be investing £1.5bn to bring fibre-based broadband to 40 per cent of the country by 2012.
Reporting its latest financial results today, BT said it now plans to boost its fibre investment to a total of £2.5bn - in order to take coverage to 66 per cent of UK homes by 2015.
"Assuming an acceptable environment for investment, we see the potential to roll out fibre to around two-thirds of the UK by 2015," said BT CEO Ian Livingston in a statement.
BT is to boost its investment in fibre
(Photo credit: BT)
According to a BT spokesman, the telco is in a better position to invest in fibre now than it was back in 2008 when it announced the first fibre rollout. "Today's results show the company has bounced back. We've now been able to free up a lot of cash in the company and so we feel it's the right time now."
The spokesman added that the costs of rolling out fibre beyond 40 per cent of UK households to reach 66 per cent are "more expensive" but "still doable".
"This is a very long term project," he said. "Our payback time on this is in the low double-digits of years. It's going to be a long time before BT gets any return on this."
Under former Prime Minister Gordon Brown, the Labour government had set a goal of ensuring 100 per cent access to next-generation broadband. It planned to support the rollout of fibre-based broadband and other next-gen technologies via a tax on telephone lines - which was broadly supported by the Liberal Democrats.
The Conservative Party - now part of a coalition government with the Liberal Democrats - did not support the landline tax plan, or match the Labour 100 per cent access pledge. Prior to the general election the Tories promised 100Mbps broadband for the "majority" of the population - favouring a 'market-first' approach, with public money used only if commercial operators failed to roll out superfast broadband on their own.
However, the BT spokesman said, on its own BT will not push beyond 66 per cent fibre coverage. Public sector support of some form will be required to go beyond that, be it at a national level via a central government administered funding support mechanism or by regional funds and local partnerships to boost coverage in particular areas. With the last third, the spokesman said costs "escalate out of all proportion".
"This [latest fibre investment] will go to the limit of where we can commercially," he said, adding: "We're pleased that all the parties - including the Conservatives - recognise that public sector funding will probably be needed to reach the final third.
"Our view is very much that the last third has to be an issue for the politicians."
The telco's commercial fibre broadband service launched back in January and has signed up "thousands" of customers so far, according to the spokesman.
"We've seen good interest in it so far," he said, adding: "It does seem to change their habits with the internet - people are now watching a lot of multiple HD streaming."