Britain's BT Mulls £10bn Investment in Hi-Speed Broadband

25 September 2007

LONDON: Prodded by government minister for competitiveness, Stephen Timms, Britain's largest telco BT has agreed to discuss investment in a national ultra-fast optical fibre broadband network.

It's a concept the telco titan has been reluctant to embrace since the government's thwarting of a similar plan back in the early 90s.

Timms fears the UK is trailing the US, France, Germany and Japan, all of which are investing in fibre networks capable of delivering broadband speeds of between 50 and 100 megabits per second.

This compares with a maximum 24 mbps that BT will offer from next year.

The head of BT's retail division, Ian Livingston, confirmed Monday that the company will meet with regulators and government representatives towards the end of this year to discuss the issue.

But the telco will likely strike a hard bargain, given that resentment still lingers at its betrayal by the John Major administration some fourteen years ago.

At that time BT sought permission to move into broadcast entertainment, in return for which it proposed to install fibre-optic cabling throughout the nation. However, the move was banned for a ten-year period - ostensibly to prevent BT, a virtual monopoly, from "stifling competition".

However, some observers believed the ban was imposed to placate News Corporation's satellite TV ambitions and those of other US cable interests, then vigorously lobbying to move into the UK.

Says Livingston: "BT remains very interested in further expanding the speed of access for customers, whether that be through faster copper; fibre to the home; or fibre to the [street] cabinet."

But a fibre network, he added, would be feasible only if competition regulators allow BT to charge rivals a "sensible price" for using the system.

Data sourced from Financial Times; additional content by WARC staff