BT plans £1.5bn investment

BT is planning to roll out fibre optic broadband to 10 million homes in a £1.5 billion investment programme.

The firm claims the investment will bring top speeds of up to 100 Mb/s and the future potential of 1,000 Mb/s to around 40 per cent of homes by 2012.

The growth is said to be necessary as demand for services such as HD TV over broadband grows.

However, before the plans goes ahead BT is calling on assurances from the regulator Ofcom that "risk-taking can be appropriately rewarded".

The firm is calling on Ofcom to remove certain regulations demanding BT still provides dial up services and maintains copper wires.

To fund the scheme BT will suspend its share buyback programme that would have cost £1.8 billion.

BT chief executive Ian Livingston said: “Broadband has boosted the UK economy and is now an essential part of our customers’ lives. This marks the beginning of a new chapter in Britain’s broadband story.

“This is a bold step by BT and we need others to be just as bold. We are keen to partner with people who share our vision for the next phase of the broadband revolution.

"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.”

Ofcom has welcomed the announcement calling it "a positive signal".

A spokesperson said: "The next step is to look at what needs to be threshed out with BT."

Fibre optic services would be sold on a wholesale basis – as currently occurs – and other providers would be able to use them.

BT is also calling on Virgin to offer its own fibre optic cables up for wholesale use.