Faster web speeds on way for 20m homes BT bills will soar to pay for it
BT will roll out superfast fibre broadband to 20million homes and businesses under a £12billion scheme – but it comes with a sting in the tail in the shape of higher bills.
The company confirmed the initiative yesterday after regulator Ofcom said it would allow the telecoms giant to pass on the full costs to customers.
BT’s new fibre network is being installed by its subsidiary Openreach, with work due to be completed over the next decade. It replaces the copper telephone wire system, which will be
‘Green light we’ve been waiting for’
switched off, and the cables will run from existing street telegraph poles.
Openreach will effectively be given free rein to increase the price of its fastest broadband services to fund the scheme. The costs will be met by internet service providers (ISPs), including BT, which offer broadband and pay TV across the fibre network.
They, in turn, will pass them on to customers. Rivals to BT and Openreach, such as Virgin Media and CityFibre, are building competing networks. They are also free to set the prices.
Britain has lagged behind Europe in building gold-standard fibre networks, leaving millions relying on poor broadband speeds.
Ofcom said: ‘We aim to allow all companies the opportunity to achieve a fair return over their investment period, and do not expect to introduce costbased prices for fibre services for at least ten years.’
Chief executive Melanie Dawes added: ‘This is a once-in-a-century chance to make the UK a world-leading digital economy.’
Ofcom will have the powers to cap prices for basic broadband services in areas where there is limited competition.
Telecoms expert Richard Neudegg, of Uswitch.com, says: ‘This does come at a cost, with Openreach able to continue charging what it likes for its fastest services for at least the next ten years.’
BT chief executive Philip Jansen said the decision by the regulator was ‘the green light we’ve been waiting for to get on and build like fury’.
UK Culture Secretary Oliver Dowden said: ‘We welcome the regulations Ofcom have announced, which strike the right balance between encouraging commercial investment and protecting consumers.’
It came as ministers announced half a million homes and businesses with slow broadband will be the first to benefit from a £5billion upgrade, with access to gigabit broadband.
Firms will be able to bid for contracts on the project from this spring, with ‘spades in the ground’ in the first half of 2022.
One gigabit is the equivalent of 1,000 megabits, capable of downloading a high-definition film in under a minute.
Boris Johnson said: ‘This broadband revolution will fire up businesses and homes, and the public services we rely on.’