BT to spend £1.5bn on 'super-fast' net

BT has announced plans to spend an additional £1bn on extending fibre in its networks with the aim of providing "super-fast broadband" to consumers.

The investment - which is on top of a £500m capital spend already planned between now and 2010 - is dependent on satisfactory regulations being put in place, which Ofcom has indicated it is willing to provide.

BT plans to spend an additional £100m in each of 2008/09 and 2009/10, taking total capital expenditure to £3.2bn and £3.1bn respectively, then £800m over the following three years. The total investment required to extend fibre to premises across a significant proportion of the UK has been estimated at more than £10bn.

The project will "give up to 10m homes access to fibre by 2012", BT said. In most cases fibre is likely to be extended to street cabinets, providing download speeds of up to 40Mbps. In some areas, primarily new developments, it will be extended to individual premises, offering up to 100Mbps.

BT said the exact split between fibre to the cabinet and fibre to the premises will be "driven by the interest shown by government and regional and local authorities". All the new connections will be capable of delivering high definition video and gaming, it believes.

The telco has made clear its investment is dependent on the government and Ofcom meeting its regulatory demands. BT is willing to sell access to its network to other providers on a wholesale basis, but wants assurance it can "earn a fair rate of return". Ofcom is also expected to make rollout cheaper by "removing current barriers to investment".

"BT will also be pressing for any other next generation access network in the UK to be open to other companies," the company said in its announcement today.

BT, Ofcom and other stakeholders are in the process of negotiating new regulations, details of which will be published in September.

BT chief executive Ian Livingston said: "We now want to make a step-change in broadband provision which will offer faster speeds than ever before. This is a bold step by BT and we need others to be just as bold... We want to work with local and regional bodies to decide where and when we should focus the deployment. Our aim is that urban and rural areas alike will benefit from our investment."

Ofcom chief executive Ed Richards, responding to BT's plans, said: "Industry cannot achieve a move as significant as the launch of super-fast broadband on its own... With this announcement industry will need further regulatory detail and that is exactly what Ofcom will provide."