Fujitsu has today unveiled plans to build a fibre network that will reach five million rural homes over the next three to five years.
The IT services provider expects the network to cost between £1.2bn and £2bn, with at least £500m coming from government funding.
The government announced in December last year that it will make £530m available up until 2015 for the roll out of rural broadband, with a possible £300m made available for the two years following that.
The Fujitsu rollout will be underpinned by Cisco technology. Virgin Media and TalkTalk intend to access wholesale products via this network.
Fujitsu will pay for access to BT Openreach's underground ducts and telegraph poles to roll out its own fibre.
Access to this physical infrastructure has come under scrutiny recently, with some ISPs arguing that BT is not providing it at a reasonable enough price.
Fujitsu agrees on this point.
"We have not agreed to pay the original price proposed by BT," said Andy Stevenson, managing director of network solutions at Fujitsu.
"The pricing that has been put forward needs to come down substantially for it to be effective," he added.
Communications minister Ed Vaizey said he is "delighted" with the Fujitsu announcement.
But although others welcome the move, they believe that the project may still struggle in the commercial market.
"This new collaboration will provide rural consumers and businesses with a real alternative to BT Wholesale, which could help them jump ahead of urban areas in terms of full fibre-to-the-home (FTTH) deployment. It is exactly what campaigners for the 'final third' have been seeking," said Sebastien Lahtinen, co-founder, thinkbroadband.com.
"Some questions remain over the commercial viability of this network taking into consideration recent pleas from the companies involved to get Openreach to reduce pricing for access to ducts and poles," he said.
"But if these can be overcome, the UK could be about to take the biggest leap forward in next-generation broadband access," he added.
Fujitsu is currently aiming to provide access to five million homes, but suggests that this could increase further if the cost of access to the BT Openreach infrastructure was lower, and if more support is offered by the government.
"We could certainly go beyond five million homes, but this wholly depends on the physical infrastructure access prices, and whether or not we could secure further government funding," said Stevenson.
BT responded to the announcement by suggesting that not enough detail about the investment has been provided.
"Today's announcement gives no detail of the investment these companies are prepared to make – in contrast to BT's publicly committed £2.5bn. It is important that the companies concerned make it clear that they are willing to invest material sums rather than just spend public money in what could be a multi-billion project," said a BT spokesperson.
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