New Delhi: British telecommunications firm BT today announced an ambitious investment of around £1.5 billion to roll out fibre-based, super-fast broadband to as many as 10 million UK homes by 2012. The investment would provide a range of services with top speeds of up to 100 Mb/s with the potential for speeds of more than 1,000 Mb/s in the future.
BT says its new fibre-based super-fast broadband will give customers enough speed to run multiple bandwidth-hungry applications. It said some members of a family could be watching different high definition movies while others were gaming or working on complex graphics or video projects.
The new services will also offer substantially improved ''upstream'' speeds allowing customers to post videos, use hi-def video conferencing and enjoy interactive hi-def gaming to the full.
BT chief executive Ian Livingston said, ''Broadband has boosted the UK economy and is now an essential part of our customers' lives. We now want to make a step-change in broadband provision which will offer faster speeds than ever before. This marks the beginning of a new chapter in Britain's broadband story."
Of the total planned investment of £1.5 billion, around two-third amounting to £1 billion is incremental to BT's existing expenditure plans for fibre deployment. BT said it expected its initial investment in the programme will 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.
Given the strategic priority of this planned investment, the BT board has decided to suspend its current share buyback programme with effect from 31 July 2008, by which date it will have returned in excess of £1.8 billion of the planned £2.5-billion buyback programme.
The telecommunications firm, however, said that it expects to raise dividends per share in the 2008-09 financial year.
The investment forms part of BT's wider strategy of delivering next generation broadband services in the UK.
Livingston 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''.
However, BT said it required "a supportive and enduring regulatory environment" for this investment to take place and sdaid that it planned to discuss with the UK communications regulator, Ofcom, "the conditions that would be necessary to enable this programme to progress".
Specifically, BT wants the removal of what it called "current barriers to investment" and making sure that anyone who chooses to invest in fibre can earn a fair rate of return for their shareholders.
The telecom firm says it plans wholesaling its new services, unlike many other companies and countries, thereby ensuring Britain remains the most competitive broadband market in the world. BT will also be pressing for any other next generation access network in the UK to be open to other companies.
It said, "Today's news is not BT being generous, it's other companies and countries that have a monopolistic attitude. We are demonstrating it's possible for incumbents to invest in new services while simultaneously remaining open and competitive."
BT already provides fibre to the premises of more than 120,000 businesses, and has deployed more than 10 million kilometres of fibre in the network.
BT is the world's oldest communications company, with a direct line of descent from the first commercial telecommunications undertaking in Europe.