BT to invest £12bn in faster broadband and reaching remote areas

BT has committed to investing £12bn in faster broadband connections to 20m UK homes, including in remote rural areas, after agreeing return on investment incentives with Ofcom.

However, some rival broadband operators warned the agreement between BT and Ofcom could mean price rises for consumers.

Philip Jansen, BT’s chief executive, has been vocal in publicly calling for the relaxation of financial and regulatory barriers, or face missing Boris Johnson’s election pledge to deliver full-fibre broadband to most of the country by 2025.

Jansen has previously warned that millions of rural homes in commercially unattractive and costly parts of the country to reach with full-fibret broadband could be the last on the list and become “second class” citizens, unless BT was allowed to gain commercial benefit from its investment.

This is good news for all fibre providers in the UK,” said Jansen. “For us, it is the greenlight we’ve been waiting for to get on and build like fury. Full-fibre broadband will be the foundation of a strong BT for decades to come and a shot in the arm for the UK as we build back better from this pandemic. Connecting the country has never been more vital.”

BT owns Openreach, which controls and is upgrading most of the UK’s broadband network. Other broadband operators, including Sky and TalkTalk, rely on Openreach’s network to provide broadband and telecoms services to customers.

Under Ofcom’s new rules agreed with BT that will apply to Openreach, the wholesale prices it charges other operators for access to the existing 40Mb copper wire broadband network will remain flat. They have dropped 20% in recent years.

However, Openreach will be allowed to charge broadband operators more for services delivered over the new full-fibre network.

TalkTalk claimed this price incentive Ofcom has given to help BT invest in full-fibre will lead to price rises for consumers.

“Ofcom’s proposals mean blanket price increases for consumers nationwide and yet full fibre won’t be available for the majority for many years to come,” said a spokeswoman for TalkTalk. “This approach is at odds with Ofcom’s principal duty to further the interests of consumers and promote competition.”

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