BT poised to boost roll-out of fibre optic broadband service

MILLIONS of homes are in line for a radical broadband improvement, with BT poised to approve a multi-billion pound investment to replace ageing telephone lines with state-of-the-art fibre optics.

It is understood the telecoms giant plans to commit new cash to its Openreach network subsidiary following a board meeting this week. Sources said the company will initially commit to an extra 1m homes within two years, on top of the 2m already committed.

BT is also expected to back Openreach’s ambition for millions more upgrades in the next few years, with caveats including simpler planning rules, lower business rates and less strict price caps on current services.

It raised the issues as part of a meeting with Karen Bradley, the former Culture Secretary, in December. Matt Hancock, her replacement, has been an advocate for more “full fibre” connections.

Openreach has pressed its parent company for as much as £6bn to deliver faster and more reliable broadband to 10m homes by 2025 and could look to go further as installation costs come down. It is understood its business case has also been bolstered by data proving there will be a sharp reduction in maintenance costs.

A major investment is set to be approved as BT’S network faces mounting competition and the company comes under political pressure. Germany, France, Spain and Italy all have extensive full fibre networks, while only about one in 50 British homes is connected. Openreach, which serves Sky, Talktalk and Vodafone services as well as BT, has been consulting on how best to upgrade phone lines and recoup the cost.

Ofcom, the industry regulator, last year demanded a legal separation of Openreach in part to allow it to work more closely with customers other than its parent company on the future of broadband. Its discussions have included talks on large scale joint investment in full fibre with Vodafone.

The talks have however cooled since November, when Vodafone announced a collaboration with Cityfibre, the challenger network builder, to connect a million homes, putting pressure on Openreach over its wholesale pricing.

Virgin Media is also strengthening its challenge to Openreach. It is expanding its cable network to cover an extra 3m homes by 2020

Openreach declined to comment on the planned announcement next week.