BT details broadband expansion plan as it battles demands for a break-up

BT has fended off calls for a break-up as it set out ambitious plans to deliver ultra-fast broadband to 10 million homes by 2020 – five years earlier than planned.

The FTSE 100 giant set out its vision for the future at a conference in the City, as it fights back against threats to split the group up by spinning off its network operator Openreach.

BT’s chief executive, Gavin Patterson, said the new target for ultra-fast broadband could be achieved within the existing capital expenditure budget of £2.3bn a year.

BT’s industry rivals argue that Openreach is failing consumers with poor service, and that BT has an in-built advantage because it owns the only company currently allowed to connect homes to the fibre broadband network.

A Sky spokesman claimed BT was protecting its “self-interest”.

He said: “For years, BT has been under-investing and delivering poor-quality service for customers. Only a truly independent Openreach will unlock the investment, innovation and competition required to deliver the digital connectivity of the future.”

However, Mr Patterson hit back at those who accuse BT of under-investing in the network and inhibiting the country’s digital expansion.

He said that the existing industry structure had worked, making the UK one of the most developed internet economies.

“There is no example of separating the broadband company from the telecom operator in the world that has worked,” he said.

“We do think that it is the best thing for Openreach to remain separate but part of our company.”

He added: “For the past five years, the UK has been the largest digital economy in the G20, by percentage of GDP. We want to forge an ultra-fast 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.”

Ofcom, the telecoms regulator, said earlier this year that it would consider separating Openreach from BT, as part of the biggest review of the communications and broadband industry for 10 years.

BT said that it now aimed to reach 96 per cent of homes with superfast broadband, exceeding the Government’s 95 per cent target.

At the same time, the company has made a commitment that it will deliver a new universal standard for broadband under which every property receives a speed of between 5Mb/s and 10 Mb/s, making it possible to watch video services such as You Tube in high definition.

Ultra-fast broadband, with speeds of 300 Mb/s to 500 Mb/s, will be available to 10 million homes by the end of 2020.

Shares in BT closed down 2 per cent, or 9.5p, at 404p in a falling market.