KCOM Share News (KCOM)

LONDON (Alliance News) - The Office of Communications said it has appointed BT Group PLC and KCOM Group PLC to deliver the government's 'universal broadband service' starting March 2020.

The service guarantees UK homes and offices the legal right to request a decent and affordable broadband internet connection.

Ofcom said: "We have decided that BT and KCOM are best placed to meet the challenges of providing universal service connections. So BT will be responsible for connecting properties in the whole of the UK except the Hull area, where KCOM will be the designated provider."

The two telecommunications firms, BT and KCOM, have until March 20 next year before they must begin rolling out the service. After that, the companies have 30 days following a request to confirm if someone is eligible and, if they are, deliver a connection.

In all cases, connections must be put in place as fast as possible. At least 80% of BTs connections must be delivered within 12 months, 95% in 18% months, and 99% in 24 months. KCOM must deliver a connection no later than 12 months after an order is placed, unless in exceptional circumstances.

Homes and offices will be able to request broadband with a minimum speed of 10 megabits per second and upload speeds of at least 1 megabit per second at an affordable price. If the only available service at this speed costs more than GBP45 a month then the household making the request is eligible.

Those who already have decent and affordable broadband access, or are due to be connected by a different publicly-funded scheme, are not eligible.

The cost of providing connections to these homes is covered under under the legislation up to GBP3,400. Above this amount customers can either pay the extra cost or seek a different solution, like satellite broadband, that is not covered by the universal service.

At present, 620,000 homes and offices stand to benefit from the new scheme, although this number is falling as broadband networks are upgraded. The majority of these homes and offices are very remote or are far from exiting broadband networks.

Ofcom Consumer Group Director Lindsey Fussell said: "As more of our daily lives move online, bringing better broadband to people and businesses is crucial. From next year, this new broadband safety net will give everyone a legal right to request a decent connection - whether you live in a city or a hamlet. This will be vital for people who are struggling to get the broadband they need."

In Autumn, Ofcom will consult on which other companies would contribute to a fund to cover costs not expected to be covered by BT or KCOM.

Shares in BT were down 0.3% at 201.00 pence on Thursday while KCOM shares were up marginally at 110.02p.