In sync with its strategy to deliver next generation internet services in the UK, BT plans to invest £1.5bn in fibre-based, super-fast broadband to provide services with speeds up to 100 Mbs by 2012.
BT says that out of £1.5bn, around £1bn is incremental to the company’s existing expenditure plans for fibre deployment. BT expects its initial investment in the programme to be around £100m of incremental capital expenditure in each of the 2008/09 and 2009/10 financial years. The remaining incremental spend of £800m will be spread over the following three financial years.
BT will initially work with government and regional and local authorities on the roll out plans. It will expand the service to both urban and rural areas after ensuring that there is demand for fibre. It aims to provide the service to as many as 10 million homes by 2012.
Ian Livingston, CEO of BT, said: “This is a bold step by BT and we need others to be just as bold. We are keen to partner with people who share our vision for the next phase of the broadband revolution. 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.”
The super-fast broadband is expected to provide consumers with enough speed to run multiple applications. So, for example, some members of a family can watch different high definition movies while others play games or work on complex graphics or video projects. The new services may also improve upstream speeds for customers to post videos and use HD video conferencing.
Earlier in July 2008, Ofcom set out a pro-investment framework for next generation, super-fast broadband networks and invited industry leaders to commit with the regulator to help implement its rollout across the country.
BT intends to discuss with Ofcom regarding the creation of a new regulatory framework to go ahead with the project.
Welcoming BT’s plan, Ed Richards, CEO of Ofcom, said: “Industry cannot achieve a move as significant as the launch of super-fast broadband on its own. Ofcom has led the way in prompting a debate about the regulatory environment for super-fast broadband deployment. With this announcement industry will need further regulatory detail and that is exactly what Ofcom will provide.”
Richards has said that the regulation would provide the right incentives for operators to invest, recognising the risky nature of the investments.