BT Chief Executive Gavin Patterson has unveiled the company’s ambition to deliver Britain’s digital future, cementing the nation’s future prosperity as the G20’s leading digital economy. The move follows criticism of the telco’s broadband strategy, with a number of competing players calling for the UK Competition and Markets Authority to undertake a full market investigation, claiming serious problems with the ownership of the national telecoms network by BT Openreach.
Ninety per cent of UK premises can already access fibre broadband, putting the UK top of the EU’s largest countries, according to Ofcom.
Speaking at BT’s Delivering Britain’s Digital Future conference in London, Patterson announced pledges designed to go further and:
tackle slow speeds in hard-to-reach parts of the country;
achieve a step-change in speeds overall, with ultrafast rollout starting next year;
improve customer service, through a number of commitments unveiled by Openreach.
Patterson said: “For the past five years, the UK has been the largest digital economy in the G20, by percentage of GDP. We think the UK has an even brighter future ahead if we make the right decisions today. We want to forge an ultrafast future for Britain and stand ready to help government deliver the broadband speeds necessary for every property to enjoy modern day internet services, such as high definition TV streaming and cloud computing. To achieve this, we need a collaborative effort across industry and government.”
Universal Minimum Speed
Patterson committed BT to supporting government in delivering a new universal minimum broadband speed of 5-10Mbps, enough for everyone in the UK to enjoy popular Internet services such as high definition video.
Patterson emphasised the need for a supportive regulatory and government policy environment to bring about a commercially viable investment. He also cited new technologies developed at BT’s Adastral Park research laboratories, which should help boost slow speeds for many hard-to-reach premises. Industry-leading research there includes tests on promising new technologies such as ‘wireless to the cabinet’ and ‘long reach VDSL’, to help bring higher speed broadband to hard-to-reach communities.
Patterson also pledged the company would introduce a satellite broadband service for some of the UK’s more remote premises by the end of the year.
Extend fibre broadband beyond UK’s current plans for 95 per cent of premises
Patterson announced BT’s desire to go “further and faster” on fibre broadband.
He made clear BT would “never say no” to providing faster broadband to communities, promising the company would instead explore innovative funding and technical solutions. He said 90 communities were already benefiting from this approach.
The BT chief executive said the UK would go beyond government’s current 95 per cent target for fibre availability, thanks to “success dividend” clauses in contracts covering rollout co-funded by BT, Whitehall and local councils.
The clauses mean BT has to reinvest or return money if take-up exceeds certain levels in areas where public funds have been used. A sum of £130 million is already being released and is potentially available to get the UK towards having fibre available at 96 per cent of premises. A greater proportion of premises will have access to fibre broadband than can access mains gas.
He also announced plans to supply fibre broadband for all new housing developments, either through BT’s own efforts or in cooperation with developers.
From Superfast to Ultrafast speeds, reaching 10 million premises by end of 2020
Patterson stressed the potential benefit to homes and smaller businesses from ultrafast broadband technology. These services will sit beside ‘Ethernet’ broadband services which already offer ultrafast speeds to larger businesses and organisations which can pay for bespoke dedicated lines.
Patterson went beyond his January statement on ultrafast broadband, to say BT’s new services of 300-500Mbps would reach 10m homes and smaller businesses by the end of 2020, and the majority of premises within a decade. A 1Gbps service will be provided for those that want even faster speeds. The connections on offer would be a combination of Fibre-to-the-Premises technology, as well as new G.fast technology, which uses existing Fibre-to-the-Cabinet technology.
Delivering a step-change in customer service for all: new Openreach charter
Joe Garner, the Openreach chief executive, said there was more to do on service. He emphasised his organisation’s progress on service, exceeding all 60 Ofcom service standards in 2014/15, as well as hiring 3,000 extra engineers, reducing installation waiting times, fixing faults faster and halving complaints. Garner made clear his ambition to exceed by 6 per cent Ofcom’s 2017 minimum standards for delivering new connections on-time.
He also cited ‘View My Engineer’ as a key step forward. This is a new service which gives customers text progress updates plus their engineer’s name and mobile number should they need to make contact.
He highlighted an issue which arises because customers often cannot deal direct with Openreach, but can only deal with their retail broadband provider. Garner declared he is open to having Openreach deal directly with end-customers, subject to consulting Ofcom and telecom providers.
New Report from KPMG values impact of BT programme at £20 billion- £30 billion
At the conference, a new report was also unveiled by consultants KPMG, valuing the impact of BT’s future commitments as worth £20 billion – £30 billion to the UK economy over the next decade.
Commenting on Patterson’s vision, a Sky spokesman said: “For years, BT has been under-investing and delivering poor quality service for customers. What the British broadband market urgently needs is radical reform, not calculated manoeuvring and caveats to protect BT’s self-interest. Only a truly independent Openreach will unlock the investment, innovation and competition required to deliver the digital connectivity of the future.”
Paolo Pescatore, Director, Multiplay and Video at CCS Insight, sees the moves as just the latest tussle between BT and its rivals, in light of BT’s acquisition of EE and Ofcom’s strategic review of the digital communications market. “More so given that many want Openreach to be separated from BT, this latest move suggests that BT is concerned by these comments and needs to come out fighting ahead of any formal announcements from Ofcom and the Competition and Markets Authority. BT is putting up a strong defence. Its latest pledges will address some of the shortcomings raised by its rivals, notably investment and service quality. However, this is unlikely to satisfy its rivals as they will still call for full separation, lower prices and greater access to BT’s network. While there are merits of BT’s acquisition of EE and retention of Openreach, regulators will be duty bound to listen to the comments of their competitors who will feel less positive about the transaction and the increasing monopolisation of the telecoms sector.”
Sky, for one, was unimpressed with Patterson’s vision, saying in a statement:
“For years, BT has been under-investing and delivering poor quality service for customers. What the British broadband market urgently needs is radical reform, not calculated manoeuvring and caveats to protect BT’s self-interest. Only a truly independent Openreach will unlock the investment, innovation and competition required to deliver the digital connectivity of the future.”
Sky was among signatories of last week’s open letter calling on regulators to investigate the relationship between BT and Openreach and its alleged damaging effect on the UK broadband market.