BT Group has pledged to upgrade broadband speeds nationwide to between 5 and 10 Mbps, in a move to appease UK regulator Ofcom, currently looking into a breakup of BT and Openreach.
The telecom giant originally planned to reach 2 Mbps minimum, but Ofcom wants at least 10 Mbps standard. The regulator claims 10 Mbps is necessary for multitasking on the web.
BT did give the caveat that the government would need to help with this push into the last 10 per cent of homes in the UK, where Internet is unavailable or lower than 2 Mbps.
To further appease Ofcom, BT is planning a £1 billion investment to bring its G.Fast network to 10 million homes by 2020. G.Fast is capable of 400 Mbps, four times faster than the fastest speed currently available on BT’s broadband network.
It will use copper cables to push the super-fast broadband instead of fibre optic, which could have millions in infrastructure costs for BT. The network is currently being tested in Cambridgeshire.
BT seems much more confident in its super-fast network than it does with its rural expansion, most likely because the benefits of 400 Mbps for homeowners that can afford it far outweigh the millions of people that may or may not want BT’s lowest end speeds.
The UK government set a mandate for BT to push broadband out to all of the country by 2017. BT is behind schedule, but is planning to offer satellite Internet for any customer unable to receive cable broadband from the company.
Sky, Talktalk and Virgin Media have all said the agreement between Ofcom and BT on Openreach is slowing down broadband innovation and giving BT a huge advantage in the telecom market.
Add to that the recent acquisition of EE for £12.5 billion, rivals worry that BT will become too big to fight against. Ofcom will release its first investigation into the complaints later this month, with eventual plans to cut back some of BT’s power on broadband expansion.
Having a fully independent Openreach would allow the government to contract more than one broadband provider. It would also allow BT to compete on a level playing ground with the rest of the broadband providers, instead of having a grant by the government and Ofcom.