BT To Invest £1.5 Billion In Super-Fast Broadband, Calls On Ofcom To Ease Restrictions
By Dianne See Morrison - Tue 15 Jul 2008 03:17 AM PST
So BT (NYSE: BT) is going ahead with its investment in super-fast broadband--as long as Ofcom plays along. The telecoms firm announced today that it will spend £1.5 billion in the next four years to roll out fibre-based broadband that could provide some 10 million homes with connections of up to 100 Mb/s, and with the potential of topping speeds of more than 1,000 MB/s in the future.
But BT warned Ofcom that it would only go ahead with the plans if “supportive” regulatory conditions to ensure its shareholders wouldn’t lose money over the investment were in place. The former state monopoly has long grumbled that its universal service obligation (USO) to provide fixed-line services at affordable costs must reflect the new world of fibre and that the company shouldn’t be the only one to shoulder the burden of kitting out the country with the types of broadband speeds already enjoyed in France and Germany. In April, BT’s incoming chief Ian Livingston flat out said that BT would not make any investment into fibre-based broadband to homes that would jeaopordise its shareholders. “It’s just not going to happen,” he said.
The company also noted that the initial investment in the super-fast broadband programmed would result in around £100 million of incremental capital expenditure in each of the 2008/09 and 2009/10 financial years, taking the total expected capital expenditure in those years to around £3.2 billion and £3.1 billion, respectively. The remaining incremental spend of £800 million will be spread over the following three financial years (release).
Posted in: Companies, BT, Legal, Regulatory, Ofcom
