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BT to push fibre to two-thirds of UK homes

The company is to spend an extra billion pounds to take fibre-based fast broadband to 16 million homes, rather than the originally-planned 10 million residences
Written by David Meyer, Contributor

BT has announced it will roll out fibre-based fast broadband to two-thirds of UK homes, a step up from its original aim of covering 40 percent of the country.

The revised plans, announced on Thursday, call for the telecom to connect 16 million homes by 2015, with four million homes hooked up by the end of this year. In July 2008, it said its fibre rollout would extend to 10 million homes by the end of 2012.

The revised plans will mean a £2.5bn, rather than £1.5bn, investment in fibre by the telecom giant.

"Assuming an acceptable environment for investment, we see the potential to roll out fibre to around two-thirds of the UK by 2015," BT chief executive Ian Livingston said in a statement. "This will take our total fibre investment to £2.5bn, which will be managed within our current level of capital expenditure."

ZDNet UK asked BT what Livingston meant by his reference to an "acceptable environment", and was told that people should "take it as a given" that the rollout will happen.

"[Livingston] was basically saying that if regulation was to change substantially, and we weren't able to achieve an acceptable return on our investment, we would reserve the right to pull [the plans]," BT spokesman Ross Cook said. "The current environment is acceptable — Ofcom have been very encouraging saying they want more fibre."

Cook added that the only other thing that could derail the plan would be a severe lack of consumer interest in high-speed broadband, but it was unlikely to happen.

Those getting fibre-to-the-home (FTTH) connections will be able to get speeds of up to 100Mbps. Those getting fibre-to-the-cabinet (FTTC) connections — where fibre is run to the street cabinet and the link between the cabinet and the home remains copper-based — will be able to get up to 40Mbps.

When BT announced its fibre plans in 2008, the company intended a 90-10 percent split between FTTC and FTTH. Since then, the split has been adjusted to 75-25, a ratio which BT said on Thursday would remain in the expanded plans.

By way of comparison, rival ISP Virgin Media currently offers 50Mbps and intends to deliver 100Mbps to some cable customers by the end of this year.

Business communications provider Viatel issued a statement on Thursday welcoming BT's announcement and suggesting that the expanded rollout could particularly benefit rural businesses. However, Viatel also warned that FTTC and even FTTH suffer from the same contention issues that "plague shared networks during busy times today", leading to slower speeds than the headline 40Mbps and 100Mbps figures suggest.

BT also released its full-year results on Thursday, showing a two percent drop in revenue, to £20.9bn, that was ahead of expectations. However, the company's debt was also down by 10 percent to £9.3bn, and cost reductions for the year to 31 March totalled £1.8bn. Earnings per share were up 16 percent to 18.6 percent.

"We have made good progress this year and have now set clear objectives for the next three years," Livingston said. "We have improved customer service, are transforming the cost base and have more than doubled free cash flow, but there is still a lot more to do."

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