(Adds company reaction, shares)
By Paul Sandle
LONDON, March 18 (Reuters) - Britain's BT said it
would roll out fibre broadband to 20 million homes and
businesses this decade after the regulator
allowed flexibility on pricing needed to underpin the 12 billion
pound ($16.8 billion) cost of the plan.
Chief Executive Philip Jansen said on Thursday it was "the
greenlight we've been waiting for to get on and build like
fury".
"Full fibre broadband will be the foundation of a strong BT
for decades to come and a shot in the arm for the UK as we build
back better from this pandemic," he said.
Regulator Ofcom said on Thursday it would give companies
flexibility on the pricing of their fastest services for the
long term.
"We aim to allow all companies the opportunity to achieve a
fair return over their whole investment period, and do not
expect to introduce cost-based prices for fibre services for at
least ten years," it said.
Britain has lagged European rivals in building gold-standard
fibre networks to homes and businesses, leaving millions relying
on a mix of fibre and old copper connections that struggle to
meet soaring demand.
Ofcom Chief Executive Melanie Dawes said companies could now
"step up and invest in the country's full-fibre future".
"This is a once-in-a-century chance to help make the UK a
world-leading digital economy," she said.
BT, which runs the national Openreach network, is on track
to reach 4.5 million premises with full fibre this month. It
plans to connect 20 million by the mid to late 2020s.
Shares in BT rose to a 13-month high in early deals on
Thursday before retreating. They were down 4% at 0834 GMT.
Alternative providers like Virgin Media and CityFibre are
building competing networks in many cities and towns.
CityFibre's Chief Executive Greg Mesch said the regulation
would "inspire confidence and unleash a decade of innovation and
investment" from competitors such as his company.
The new regulations, which apply for five years, allow BT's
Openreach national network to keep the price it charges
operators for entry-level 40 Mbit/s broadband and slower copper
packages flat and charge more for regulated products delivered
over full fibre instead of copper.
"This approach improves the investment case for BT and its
rivals by providing them with a margin to build the new
networks," it said.
Once fibre networks are in place, Ofcom said it would
progressively remove regulation on copper so Openreach would not
have to maintain two networks.
($1 = 0.7160 pounds)
(Reporting by Paul Sandle; editing by Sarah Young, Kate Holton
and Emelia Sithole-Matarise)
Vodafone (VOD)
BT (BT.A)