Britain's BT sets out ambition for ultrafast broadband

By Paul Sandle

LONDON, May 11 (Reuters) - BT proposed on Thursday building a network to connect 10 million homes with ultrafast full-fibre broadband by the mid-2020s, but told rivals which would also use the network to give their backing so the investment made commercial sense.

Britain's biggest telecoms group bowed to pressure to legally separate its Openreach networks arm in March, a move regulator Ofcom has said it hoped would lead to more investment in faster broadband.

The Openreach network is used by BT's customers and also by rivals Sky (Frankfurt: 893517 - news) , TalkTalk and Vodafone. BT's competitors have accused the company in the past of lacking ambition in rolling out faster networks.

The Openreach network measures up against the European average for broadband access, but Britain ranks 27th out of 28 countries in Europe when it comes to fibre connections which run all the way to the household or business premises, known as fibre-to-the-premises (FTTP).

Like the existing network, FTTP connections built by Openreach would be used by BT and its rivals.

After reporting full-year results on Thursday, BT said it could see a path to connecting about 10 million homes and businesses with FTTP by the mid-2020s, but needed to see a long-term business case to justify the investment.

Clive Selley, head of Openreach, said having spent a year rolling out some FTTP and learning how to lower the cost, he thought BT could get to 10 million. "The only question in my mind is how quickly do we get all the players on board."

Industry experts say BT's competitors would need to see the charges and terms of use set by Openreach before being able to offer their commercial endorsement for the plan.

BT said last year that 12 million premises would have ultrafast broadband connections by 2020, mostly using its G.Fast (Shanghai: 600391.SS - news) enhanced copper and fibre, but 2 million would have FTTP which can deliver more than 100 Mbps.

BT wants the government and Ofcom to create market conditions to underpin repayment on any new investment over 20 or 30 years, including setting a clear direction on pricing.

Ofcom is conducting a consultation on superfast broadband, which covers speeds of up to 40 megabits, and could set a cap for prices.

BT CEO Patterson said if Ofcom capped superfast broadband prices it could undermine the case for new investment in an ultrafast network.

"Low prices for 40 meg doesn't necessarily create the right conditions for long-term fibre to premises investment," he said.

A spokesman for Vodafone said the company looked forward to speaking to Openreach about the ultrafast full-fibre broadband plan. Sky and TalkTalk declined to comment. (Editing by Edmund Blair)