BT to invest £1.5bn in super-fast broadband

The investment programme aims to help the UK maintain its lead in broadband availability and boost the economy. It will allow families, for instance, to do several high bandwidth activities at once, such as watching high definition movies while others play online games.

The rollout, which is dependent on Ofcom's regulatory approval, will deliver top speeds of up to 100Mbs, but with the potential for speeds of more than 1,000Mb in the future.

Ian Livingston, BT chief executive, 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.

"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."

As well as being able to run enjoy multiple bandwidth-hungry applications consumers will also experience substantially improved speeds when it comes to the uploading of content and online high definition gaming.

Of the total £1.5bn investment plan, £1bn is incremental to BT's existing expenditure plans for fibre deployment.

BT has also decided to suspend its current share buyback programme with effect from the end of the month, having returned more than £1.8bn of a planned £2.5bn.

BT's announcement has been welcomed by Ofcom, which said the announcement would ensure that the UK remains at the forefront of developments.

Ed Richards, Ofcom chief executive, said: "This is a clear sign that the UK market is moving in the right direction, with a growing number of plans to deliver super-fast broadband services to consumers.

"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 added that "regulation needs to provide the right incentives for operators to invest, recognising the inherently risky nature of these investments" and that Ofcom wants to continue to promote a "vibrant competitive environment as we enter the next generation of communications services".

Ofcom plans to publish further detailed proposals for the regulatory framework for next generation access networks in September.

The BT investment follows the launch of its latest ad campaign, created by Swarm, for BT Business, featuring 'Dragons' Den' star Peter Jones tussling with 1980s anti-heroes the Gremlins.

The new ad tells the story of a multi-millionaire entrepreneur working alone in his office. Struggling to work his computer, it emerges that the wires have been chewed by Gremlins.

Super-fast broadband questions and answers from BT:

What will be delivered?
Fibre-to-the-premise (FTTP) or fibre-to-the-cabinet (FTTC)?
We will deliver both though the exact split will be driven by the interest shown by government and regional and local authorities. FTTP deployment will be focused primarily on new build sites such as Ebbsfleet and the Olympic Village whilst FTTC will be more prevalent elsewhere.

What speeds will be delivered and where?
FTTP will deliver headline speeds of up to 100Mb whilst FTTC will initially deliver speeds of up to 40Mb though we are investigating technologies that can increase those speeds to more than 60Mb. In addition to the new fibre-based services, copper-based ADSL2+ will deliver nationwide speeds of up to 24Mb.

Recent tests show the majority of ADSL2+ customers should enjoy speeds of around 10Mb or above with many getting substantially higher speeds. The technology is also improving all the time.

Which areas will benefit first from this investment?
BT will work with Government and regional and local authorities on the roll out plans. They can help ensure there is demand for fibre and so we look forward to working with them to ensure our roll-out is demand-driven. Our aim is that both urban and rural areas will be able to benefit.

Will fibre only be available in large cities as has happened in other countries?
No. Our aim is that fibre will be widely available and not just in the major cities -- unlike in some countries. Its precise deployment will depend on the engagement of government and regional and local authorities but there is no reason why it should not be available in a variety of environments.

Will the UK be in a stronger position after this deployment?
Yes. This plan will deliver some of the fastest speeds in the world to a far larger percentage of the population than in some other countries where fibre services are largely confined to major cities.

What will happen to those parts of the UK who won't have access to fibre?
Those areas will have access to copper-based ADSL2+, a service offering speeds of up to 24Mb. This will be sufficient for services such as Hi-Definition TV. BT will roll out fibre beyond this plan if there is sufficient demand and it can make an adequate return on its investment.

If ADSL2+ offers sufficient speed to enjoy new services, why invest in fibre?
Copper-based ADSL2+ will offer sufficient speed for services including HDTV but fibre will allow people to enjoy several such services simultaneously. It is important everyone is bold in ensuring there is sufficient capacity for future services and our plans will ensure this.

Is this investment dependent on Ofcom creating a new regulatory framework?
Yes. The right regulatory environment is vital for anyone seeking to invest. The funds required are extremely large and companies need confidence that risk-taking can be appropriately rewarded.

Will BT exclude other companies in the way companies have in other countries?
No. BT is totally committed to a wholesale market and so will make its services available on an equivalent basis to all communications providers.

Does BT believe that other next generation networks should also be open?
Yes. BT's firm belief is that all next generation networks in the UK should be open as this approach will boost competition and consumers and businesses will benefit.

What are BT's plans post this investment?
BT will review its plans on a constant basis. If there is adequate demand and interest for fibre-based broadband and BT can make an adequate return, the plans would be extended.

Will fibre-based services be more expensive?
It is likely they will be at the wholesale level but the prices that consumers and businesses will pay will be determined by the market and not just BT.

Are "next generation broadband" and "super-fast broadband" the same thing?
No. "Next generation broadband" refers to the family of new services that BT will offer. These include fibre-based "super-fast" services - such as FTTP and FTTC - as well as advanced copper-based fast services such as ADSL2+.

Is this a good time to invest given the current "credit crunch"?
It is important that we invest for the long-term. This is a bold step that will ensure businesses and consumers have all the speed they require in the foreseeable future.

Are you taking action to reduce the congestion caused by services such as the BBC's iPlayer?
Yes. BT has made it much cheaper for companies to buy extra capacity on the "backhaul" pipes that link exchanges to the core network. This move should ensure Internet congestion is minimised.

BT will also invest significant funds in improving core network capacity. Both measures should ensure customers on BT's network will enjoy a higher quality of service than those on cable networks where contention and internet congestion has been more of an issue.