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Economic troubles could hit BT’s next-gen broadband plans

Worries about the future economic climate have caused broadband provider BT to look closely at their plans to invest heavily in next generation broadband.

The company had planned to spend £1.5 billion bringing next-generation fibre optic broadband to 10 million homes in the UK by 2012, but pressure from shareholders has forced the company into a rethink.

"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'," said chief executive Ian Livingston.

In the summer, the broadband provider announced it would make a massive investment in bringing ‘fibre to the cabinet’ (FTTC), which means running high speed fibre optic broadband cables to the familiar street exchange cabinets.

It was thought that the higher broadband speeds afforded by fibre to the cabinet would allow BT to offer content such as films and television programmes via its BT Vision service, helping the telecoms provider to keep up with rivals like the BBC, who with their iPlayer have made huge ground in the broadband TV market, and Sky TV.

Now, BT will reassess their FTTC plans, but according to Livingston the broadband provider already intends to tell Ofcom they must be allowed to make a return on their investment or else their work on improving the country’s broadband infrastructure would not be economical.

17/11/2008
Author: CompareBroadbandUK staff writer

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