Faster internet for 20m... but BT’s bills will soar to fund it
BT will roll out superfast fibre broadband to 20 million homes and businesses under a £12 billion scheme – but it comes with a sting in the tail in the shape of higher bills.
The company confirmed the scheme yesterday after the 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 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 in order 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.
Ofcom chief executive Melanie Dawes said: ‘This is a once-in-a-century chance to help make the UK a world- leading digital economy.’ Ofcom will be able 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’.
It came as ministers announced that 500,000 homes and businesses with slow broadband will be the first to benefit from a £5 billion upgrade. Nine areas – Cambridgeshire, Cornwall, Cumbria, Dorset, Durham, essex, Northumberland, South Tyneside and Tees Valley – will be given access to gigabit broadband.
Work is expected to start next year. Boris Johnson said: ‘Project Gigabit is the rocket boost that we need to get lightning-fast broadband to all areas of the country.’