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BT's proposed super-fast broadband already in jeapordy

by Parm Mann on 18 November 2008, 10:54

Tags: British Telecom (LON:BT.A)

Quick Link: HEXUS.net/qap6o

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BT's plans to invest £1.5 billion in a fibre-optic infrastructure that will bring broadband speeds of up to 100Mbps to some ten million British homes by 2012 are already at risk.

According to chief executive Ian Livingstone, BT's shareholders are reluctant to make such an investment in today's economic climate. Speaking to The Guardian, he states:

"I have to tell you there are some shareholders who say 'you know something, don't do that, don't do a whole lot of other things. That leaves you with a lot more cash and cash today is worth a lot more than cash in a few years' time'."

The cost of BT digging up hundreds of British roads to lay fibre-optic cables was said to be funded by suspending its £2.5 billion share buy-back programme. However, it now appears that BT's shareholders are doing whatever they can to balance the books.

The telecoms giant announced plans last week to axe 10,000 jobs - a measure it said would result in savings of £250m. But is it all about saving money or is BT bullying Ofcom into providing more leeway?

When announcing its fibre-optic plans in July 2008, BT stated that the proposal remained dependant on Ofcom - who it hoped would relax restrictions and allow BT to ensure a valuable return on its investment.

Signalling the importance of Ofcom's role, Livingstone adds:

"We need to have the environment in which our shareholders feel there is a good chance of us making a return. If we cannot have that environment this is not the time to be taking on sure-fire losses."

We'd be willing to bet that super-fast broadband will remain on course for 2012 should Ofcom meet BT's demands.



HEXUS Forums :: 20 Comments

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Hmm 2012 super-fast broadband or 2012 Olympics, which would benefit the country more?
pauldarkside
Hmm 2012 super-fast broadband or 2012 Olympics, which would benefit the country more?

superfast broadband to only 10million mind you, Olympics will cost much much more
I don't understand why they team up with Virgin who already have 90% of the country in fibre? Why go to the trouble of laying more? Surely it'll be cheaper to rent the lines off virgin? Ultimately i think telecomunnications in the UK need to be Nationalised.
FoxdieUK
I don't understand why they team up with Virgin who already have 90% of the country in fibre?
*Snigger*
pauldarkside
Hmm 2012 super-fast broadband or 2012 Olympics, which would benefit the country more?
A fibre infrastructure that provides 100mbps to the home will last for decades to come and will have far more important business and telecommunications applications, with a multiplexing of services which will remove the need to service multiple lines for distinct service types. On the other hand, the Olympics cause a massive drain in resources for a few years, for an event that only lasts a month, and you have nothing to show for it once it's over other than a big pile of rubbish and a massive stadium that has no use other than to horde valuable space.

Yeah, the Olympics is obviously the better investment.