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May 5, 2016updated 05 Sep 2016 11:49am

BT to offer millions of homes ultrafast broadband in £6bn upgrade – but Sky slams ‘limited ambition’

News: The company reported a 15% increase in annual profits to £3.03bn.

By CBR Staff Writer

BT has unveiled plans to invest approximately £6bn over the next three years in faster broadband and mobile services. The company intends to provide ultrafast fibre broadband to 2 million UK homes.

Under the investment plan, BT will deploy ultrafast broadband to a minimum of 10 million homes and businesses, subject to regulatory support, with an ambition to reach 12 million by 2020.

BT connect 2 million homes to fibre-to-the-premises (FTTP) broadband, mainly in new housing developments, high streets and business parks. BT announced no plans to target the FTTP rollout to rural areas, some of which have the worst broadband speeds in the country.

Most consumers will receive that through BT’s G.fast technology, which is currently capable of providing speeds of up to 300Mbps, and reach 500Mbps in the next few years.

The plans will see both fibre and 4G reach 95% of the UK by 2020.

BT chief executive Gavin Patterson said: "G.fast is an important technology that will enable us to deploy ultrafast broadband at pace and to as many homes as possible.

"Customers want their broadband to be affordable as well as fast and we will be able to do that using G.fast."

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However, responding to BT’s broadband investment plan, Andrew Griffith, Group Chief Operating Officer & Chief Financial Officer, at competitor Sky, said: "Today’s statement shows that BT continues to see copper as the basis of its network for 21st century Britain. Despite BT’s claims, it is clearer than ever that their plans for fibre to the premise (FTTP) broadband will bypass almost every existing UK home.

"This limited ambition has been dragged out of BT by the threat of regulatory action, demonstrating once again why an independent Openreach, free to raise its own long-term capital, is the best way for the UK to get the fibre network it needs."

BT also reported a 15% increase in annual profits to £3.03bn due to strong demand for broadband and TV services. Revenue increased 6% to £18.9bn, including £1.05bn contribution from mobile operator EE.

The company’s results were boosted by a strong year for BT Consumer TV, whose customer base increased by 28% to 1.5m.

BT Consumer’s revenue increased 7% to £4.59bn for the year ending 31 March 2016, compared to £4.28bn in 2015.

BT said audiences for its sports coverage increased 45% after the launch of UEFA Champions League and UEFA Europa League content.

Paolo Pescatore, Director, Multiplay and Media at CCS Insight, said: "Overall, this is a good set of results as BT Consumer continues to stand out with another strong quarter of subscriber and revenue growth compared to other segments, further reinforcing the benefits of acquiring EE. However, we are somewhat disappointed with the lack of growth in TV, given the acquisition of key rights and the first to launch live TV in 4K, in the UK.

"It has been a very pivotal year for the company; with a return to the consumer mobile market, the acquisition of EE and the exclusive destination for UEFA Champions League football. But the competitive and regulatory environment remains challenging; which the company still has to overcome. The significant investment in networks will go somewhere to appease regulators.

"This being said, BT and EE combined represent a formidable force to tap into the opportunities that exist in convergence for both business and consumer.

BT’s £12.5bn acquisition of EE was cleared by the Competition and Markets Authority (CMA) in January.

Patterson said: "The integration of EE is going well and we now see the opportunity to deliver more synergies than we originally expected, and at a lower cost. And we’re reorganising our business to better serve customers both in the UK and internationally."

BT aims to hire 1,000 new engineers this year as part of an effort to enhance customer service.

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