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London - UK telecommunications company BT said on Tuesday it plans to invest £1.5bn in rolling out a fiber-based broadband internet service to as many as 10 million UK homes by 2012, as a result of which it plans to suspend its share buyback program from July 31.
BT said the fiber investment program will deliver top internet download speeds of up to 100 megabytes per second, with potential for speeds of more than 1 000 Mbps in the future.
However, BT made it clear it will only make the move if UK communications industry regulator Ofcom allows it to get a decent return on that investment.
Earlier this month, Ofcom chief executive Ed Richards set out a pro-investment framework for next generation broadband internet networks and invited industry leaders to help roll out the technology across the UK, part of wider discussions between regulators and operators across the European Union.
A spokesperson for Ofcom said BT's decision is "good news. "It's a clear signal that the UK telecommunications market is moving in the right direction," she said.
BT said on Tuesday its investment plan is part of its strategy to deliver next generation broadband services in the UK, including high-definition TV, high-quality video and teleconferencing.
"Broadband has boosted the UK economy and is now an essential part of our customer's lives. We now want to make a step-change in broadband provision which will offer faster speeds than ever before," said BT chief executive Ian Livingston.
In order to make the investment, Livingston told reporters that the company "must actually be able to make a return. We're not going to do this if it destroys shareholder value."
Livingston said there should also be a stop in the rollout of copper, a much slower method of delivering communications which he said hinders the laying of fiber.
BT already provides fiber-based broadband internet services to more than 120 000 businesses, with more than 10 million kilometres of fiber in that network.
BT plans to invest around £1.5bn in total on the program, of which around £1bn is incremental to BT's existing expenditure plans for fiber deployment.
- Dow Jones