BT promises one gigabit broadband by 2020 in £6bn investment pledge

BT pledges ultra-fast fibre broadband to 12 million homes and businesses to relieve regulatory pressure

Telecoms giant BT has pledged to lay fibre to two million homes and businesses across the UK and to provide super-fast broadband to 12 million premises by 2020 as it bids to head-off regulatory action that could see it broken up. The investment could mean many homes and businesses enjoying one gigabit per second (Gbps) internet connections by 2020.

Following the completion of its acquisition of EE, it also promised to extend "4G and superfast broadband coverage" to 95 per cent of the UK.

It follows a report by Ofcom that fell short of demanding that BT's infrastructure should be floated off from the company. Ofcom instead suggested that BT should be compelled to literally give access to its network infrastructure to rivals so that they can install their own fibre alongside Openreach's cables.

Coming on the same day that BT filed its financial results for the year to the end of March, BT claimed that Openreach and EE will between them invest £6bn in capital expenditure over the next three years in the first phase of a plan to "extend superfast broadband and 4G coverage beyond 95 per cent of the country by 2020".

It continued: "Ultrafast broadband will be deployed to a minimum of 10 million homes and businesses in the same period, subject to regulatory support, with an ambition to reach 12 million. There will be an increased focus on fibre-to-the-premises (FTTP) technology within this plan, with the aim being to reach two million premises with the technology, mainly in new housing developments, high streets and business parks."

In recent years, BT has offered to extend fibre to the premises for a price, but that has only been available for customers connected to certain exchanges, and BT has struggled to keep up with demand. Its current fibre offerings are largely fibre to the nearest cabinet, with aging copper lines taking the network signal from the cabinet to the home.

BT Group CEO Gavin Patterson claimed that the investment would enable the company to offer 1Gbps internet connections to the homes and businesses lucky enough to be included in the first phase of its rollout.

"G.fast is an important technology that will enable us to deploy ultra-fast broadband at pace and to as many homes as possible," said Patterson.

He continued: "Customers want their broadband to be affordable as well as fast and we will be able to do that using G.fast. FTTP will also play a bigger role going forward and I believe it is particularly well suited to those businesses who may need speeds of up to 1Gbps. My ambition is to roll it out to two million premises and our trials give me confidence we will."

Patterson was keen to assert that BT's promise was evidence of a well-functioning, competitive market - one that doesn't require the kind of radical surgery that many people, including MPs, have been urging.

"Networks require money and a lot of it. Virgin and BT have both pledged to invest and we will now see if others follow our lead. Infrastructure competition is good for the UK and so is the current Openreach model whereby others can piggyback on our investment should they want to," said Patterson.

The announcement was made as BT unveiled full-year revenues of £18.9bn - an increase of six per cent - and profit before tax of just over £3bn, up by 15 per cent compared to fiscal 2015.