BT Pledges £6bn Fibre Upgrade As Ofcom Lurks

BT has announced a £6bn investment in broadband and 4G coverage as its Openreach division faces regulatory pressure.

The FTSE 100 firm announced alongside its annual results, showing a 15% rise in pre-tax profits to £3bn, that it would extend ultrafast broadband to at least 10 million homes and businesses.

BT also pledged to lay fibre optic lines to around two million premises across the UK - with investment focusing on new housing developments, high streets and business parks through the replacement of ageing copper wiring.

It said the money would be spent over three years by Openreach - its infrastructure arm - and mobile operator EE which it bought earlier this year.

The company has been under pressure from rivals, who have to use BT's cabling, to invest more and bolster customer service - arguing BT's wider business interests provide a conflict of interest.

Firms such as Sky, the owner of Sky News, and Virgin Media have accused the regulator OFCOM of not going far enough in a recent review of Openreach's operations which stopped short of recommending the division was split from BT though a final decision is yet to be taken.

OFCOM moved to bolster competition by suggesting Openreach opens up its network of telegraph poles and underground tunnels to allow others to build their own, advanced fibre networks.

BT has claimed that rival operators have shown little interest in making their own investments and it will hope that today's decision will go some way to easing the regulatory focus.

Chief executive Gavin Patterson said: "The UK is a digital leader today and it is vital that it remains one in the future.

"That is why we are announcing a further £6bn of investment in our UK networks, subject to regulatory certainty."

Andrew Griffith, Sky chief operating officer, responded to the announcement: "Today's statement shows that BT continues to see copper as the basis of its network for 21st century Britain.

"Despite BT's claims, it is clearer than ever that their plans for fibre ...will bypass almost every existing UK home.

"This limited ambition has been dragged out of BT by the threat of regulatory action, demonstrating once again why an independent Openreach, free to raise its own long-term capital, is the best way for the UK to get the fibre network it needs".