BT plans £1.5-billion investment in super-fast broadband
16 July 2008
New Delhi: British telecommunications firm BT today announced an ambitious investment of around £1.5 billion to roll out fibre-based, super-fast broadband to as many as 10 million UK homes by 2012. The investment would provide a range of services with top speeds of up to 100 Mb/s with the potential for speeds of more than 1,000 Mb/s in the future.
BT says its new fibre-based super-fast broadband will give customers enough speed to run multiple bandwidth-hungry applications. It said some members of a family could be watching different high definition movies while others were gaming or working on complex graphics or video projects.
The new services will also offer substantially improved ''upstream'' speeds allowing customers to post videos, use hi-def video conferencing and enjoy interactive hi-def gaming to the full.
BT chief executive Ian Livingston said, ''Broadband has boosted the UK economy and is now an essential part of our customers' lives. We now want to make a step-change in broadband provision which will offer faster speeds than ever before. This marks the beginning of a new chapter in Britain's broadband story."
Of the total planned investment of £1.5 billion, around two-third amounting to £1 billion is incremental to BT's existing expenditure plans for fibre deployment. BT said it expected its initial investment in the programme will result in around £100 million of incremental capital expenditure in each of the 2008-09 and 2009-10 financial years, taking the total expected capital expenditure in those years to around £3.2 billion and £3.1 billion, respectively.
The remaining incremental spend of £800 million will be spread over the following three financial years.
Given the strategic priority of this planned investment, the BT board has decided to suspend its current share buyback programme with effect from 31 July 2008, by which date it will have returned in excess of £1.8 billion of the planned £2.5-billion buyback programme.
The telecommunications firm, however, said that it expects to raise dividends per share in the 2008-09 financial year.
The investment forms part of BT's wider strategy of delivering next generation broadband services in the UK.
