Under fire from rivals, BT vows to improve broadband network

By Paul Sandle
A man talks on his mobile telephone as he walks past a BT logo in London, February 5, 2015. REUTERS/Suzanne Plunkett

By Paul Sandle

LONDON (Reuters) - Facing a sustained attack from rivals, Britain's BT pledged to improve the speed and quality of the country's broadband network on Tuesday in a bid to ward off calls for it to be broken up.

Setting out plans to improve coverage in rural areas where services can be slow, Chief Executive Gavin Patterson said the firm would provide new minimum speeds of 5-10 megabits per second (Mbps) and expand its fiber coverage.

He also said its fastest "ultrafast" 300-500 Mbps broadband would serve 10 million premises by the end of 2020.

The ultrafast pledge would not require a hike in capital expenditure, he said, with BT continuing to spend 300 million to 400 million pounds ($461-$614 million) a year on fiber.

The broadband market leader, which is buying mobile operator EE, owns the copper and fiber networks that serve rivals like Sky and TalkTalk as well as BT's own residential and business customers.

The networks division Openreach is managed at arm's length, but critics say the structure allows BT to abuse its market position and has hampered investment.

They said there were serious problems caused by BT owning Openreach, such as poor customer service, in a letter to the Financial Times on Monday.

Patterson said BT had already helped Britain to become the largest digital economy in the G20, and he pledged to go further.

"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," he said.

BT would go beyond the government's target for fiber broadband to reach 95 percent of premises by 2017, he said, and would squeeze more out of copper to improve speeds.

"This is a time we need to invest, we need a clear mandate, and we need stability," he said.

Openreach had improved service levels - a major bugbear for customers, he said, and the unit had bold ambitions to meet demand for connectivity.

Sky said BT had been under-investing and delivering poor quality service for years.

"What the British broadband market urgently needs is radical reform," a spokesman said.

The government had set a target for universal access to broadband speeds of 2 Mbps by 2016, although it has estimated that 90 percent will have access to speeds of more than 24 Mbps by early 2016.

(Editing by Kate Holton)