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Telecoms giant BT Group today suspended its £2.5 billion share buyback programme to spend £1.5 billion rolling out a super-fast broadband network providing 10 million homes access to fibre within four years.
In his first major move since taking the reins at BT this month, chief executive Ian Livingston said the investment would provide British households with faster broadband speeds than ever before.
BT's shares fell almost 4 per cent in early trading to 195p, their lowest for nearly three years.
BT said the £2.5 billion share buyback programme, announced last May, would be suspended from July 31, in order to pay for the additional investment but the telecoms group said there was no danger that it would cut its promised dividend.
Mr Livingston, 43, who succeeded former cheif executive Ben Verwaayen this month, said the super-fast broadband would deliver speeds of up to 100 megabits per second through fibre cables.
He said in a statement: “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."
“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”.
Mr Livingston said a "supportive and enduring regulatory environment" was essential to deliver broadband to 10 million households. BT is holding discussions with Ofcom on ways to deliver the programme. BT said these included removing barriers to investment and ensuring a "fair" rate of return for investing in broadband.
BT said fibre-based super-fast broadband would give customers enough speed to run multiple bandwidth-hungry applications. "For example, some members of a family could be watching different high definition movies while others were gaming or working on complex graphics or video projects," the statement said.
BT provides fibre to the premises of more than 120,000 businesses, and has deployed more than 10 million kilometres of fibre in the network.
Mr Livingston is set for rewards of almost £7 million in his first year as chief executive of BT if he meets targets of a new incentive scheme.
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BT have missed the Internet phenomina since its get go. Now to great fanfares they plan to catch up with most of Western Euriope and Asia. How come the old Nationalized industries, British Gas, British Airways, Brtitish Telecom have lost the plot?
Len charles, gateshead, UK
Living in the country I get 300kbps but pay the same line rental & ISP charge as all you lucky people on higher speeds. This needs sorting first.
Barry, Dover, UK
The plan already being actioned is to shut down the public Internet replacing it with a privatised version as icann's meetings in Europe confirm.
D Stanley, Coventry, England
The last mile will still be copper or Aliminium. 100MB to the DP 5MB to your house.
steve tea, manchester, cheshire
BT said- "some members of a family could be watching different high definition movies while others were gaming or working on complex graphics or video projects," . What families are they? This is bound to be rolled out only in cities for cost reasons. A techie gimmick. Nothing for average customer.
Richard Evans, Merthyr Tydfil, Wales
I would love to get a reliable broadband service that doesn't disconnect all the time. So fibre optics instead of aluminium lines will be great, then I might actually get broadband speeds too. A lot of people are paying for a 8Mbps service they don't get and BT should try to put this right first.
Caroline, Shrewsbury,
Hasn't the Times got a picture of BT Tower with it's current logo ? The piper went years ago.
Keith Jones, Korat, Thailand
Obviously the customer will have to pay for these so called improvements. OFCOM will allow the costs to be structured so that the business pays very little. At privatisation everyone thought that business would bear their own costs -What a fiddle. Don't forget to put the line rental up as well BT !!
Richie, Cardiff, Wales
This is very good news although here in rural Scotland I doubt we'll see this rolled out in my lifetime.. It's important because of the need to increase the numbers of people who can work from home so saving fuel and cash... Good for BT... Long overdue but welcome all the same..
DickW, Aberdeenshire, Scotland
I agree with Andy T. They should start with the people who struggle to get good speeds, like myself.
A positive move however from BT.
Steven, Sheffield, UK
Who are BT kidding. replacing the copper wire with fibre optic cables? Killing fatted calf of copper wire doesn't make sense unless the alternative begets more wonga.
Just look at our streets and remember the advert for everyone putting their cables into the same hole?
michael murphy, brightlingsea, england
I live in the DL5 post code area and on enquiring about taking up BT Vision I was informed that my area couldn't have BT Vision because the line speed was only 1.5MB against the required speed of 2MB minimum, BT make you laugh when they talk about 100/1000MB speeds.
Peter Dolan, Newton Aycliffe, England
Perhaps it would be better to first invest the relatively small sums required to upgrade parts of the telecoms infrastructure outside of London? Large parts of the UK do not have access to broadband as BT refuses to spend money to remove DACs lines from rural exchanges. Just a thought...
PC, London,
And Cowplain too.
Within reason I'd even settle for 8Mb meaning 8Mb, not 1.5-2.75 depending on how fast the hamster is running today.
Bit of market research in the sticks chaps and you'll get a lot of replies like this.
Andrew Fanner, Cowplain, UK
As usual BT make you think you're getting something special when you're not. A real 'new chapter in Britain's broadband story' would free the user from the telecom company. It doesn't have to be a telephone line stuck in the back of your PC and there are better signal carriers out there.
Andrew, Richmond,
Been using Virgin Broadband since January and that is fibre optic - fantastic speed always 54mbps and a great internet experience. Hope it goes well for BT although not surprised there are still some moaners out there having a grumble about anything that tries to improve our lot!
Chris Butler, London,
I live three miles from the exchange (by road) and I'm damn lucky if I can get 750kbps. The infrastructure out here in extremely rural Lincolnshire is just not up to providing high speed B/Band. My heart goes out to those still using dial-up. I'd quite forgotten how bad it was.
Keith, near(ish) Grantham,
Be better if they actually bothered to provide the service they advertise - BTsay I should think myself lucky to be getting 1mB on their "up to 8mB" service. And I live in a town within a mile of the exchange.
But what do you expect with a monoply of the local distribution network.
steve, benfleet,
Here in Canada we're governed by the CRTC which caps broadband to 8 MB (down) and 3 MB (up). My ISP (Rogers) 'gives' customers 95 G 'free' bandwidth / month, then charges up to $25 if you use more. We're already paying $50 / mo for internet.
We no longer have unlimited use, or usenet. It's insane.
Donna, Newmarket, Ont., Canada
Why only 100 Mbit/s? I live in Japan, and GPON ( 1Gigabit/s or 1,000 Mbit/s) is rapidly becoming the mainstream fibre service here (and 50% of residental broadband is already on fibre). Plus will this still be on copper from the cabinets, with all the radio interference and performance issues?
Colin P., Tokyo, Japan
Ofcom and the grey hand of Govt. really do have a lot to answer for. It is only now after promising BT and others a decent rate of return and a stable environment that BT and hopefully others are willing to invest their shareholders money into next generation fibre. Take a bow Ofcom.
Colin, Brighton ,
This is good news. It is not trying to run before you can walk. BT's to home infrastructure is years out of date.
The fact is the telephone network needs a complete overhaul. There is only so much you can squeeze out of poor foundations that are telephone cables. The sky is the limit with fiber
Andy, Portsmouth,
Fibre optic cables would solve the problems of 'upto' speeds. virgin currently use them, so it would put BT in the same broadband pool as them.
Michael, Manc,
To all you neh-sayers. BT are planning "fibre-to-the-cabinet" for existing households. This means your distance from the exchange (which is why you are have slow speeds) will not affect your download speed with the new system.
Let's hope Ofcom do the right thing to allow BT this investment.
Jim
Jim B, Padstow, Devon
Would somebody please explain to me the logic of being able to download at over 4Mb per second when all broadband is capped if limits are exceeded.
Most fast broadband exceeds that limit by watching one tv show a day .
Its a product for a market that is no longer there.
Huxley, keighley, west yorkshire
Fred and Andy, to quote from the article: "Our aim is that urban and rural areas alike will benefit from our investment" I think this means not just cities, unless it means rural cities!
John M, Ipswich, UK
Get normal broadband working at a sensible speed first please; BT infrastrucuture in non urban areas is rubbish and I m not talking about remote places either.
Fenester, Winchester, UK
100mb? It would be good if BT spent a portion of the money providing broadband to those for whom a dial-up speed of 21.6kb is a treat! We normally have to put up with 16.8 or 19.2. It takes 4 to 5 minutes to load the average Times page, even longer for encrypted online banking pages.
Suzie, Hebrides, Scotland
'trying to run before you've learnt to walk'. Too ambitious for a company who don't even get the basics right. 'Up to' speeds aren't worth the paper they're printed on anyway. I've got superfast 20mb broadband which rarely tops 6.5mb in reality.
Dorothy Com, Leeds,
This is great news for cities. The balance between choosing to live in town or the country is decisively switching towads the city and that's a good thing. Ironically it's far greener.
fred keeling, almunecar, spain
Well done B.T. It's about time we started to invest in some really fast broadband. Let's hope it starts in East Sussex (around the Seaford area possibly!).
Nick, Seaford, UK
I wouldn't mind 'Normal' speed broadband (4Mb) as opposed to the 256k that I get now due to being at the end of a spur from the exchange. Come on BT update some of your outlying lines instead of pandering to people around big cities with fast ethernet speeds.
Andy T, Abergavenny, South Wales