* Regulator Ofcom aims to encourage fibre build
* Gives companies more flexibility on pricing
* BT has certainty to invest 12 billion pounds in its
network
(Adds further comments from minister, CityFibre)
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 gave it flexibility
on pricing needed to underpin the 12 billion pound ($16.8
billion) cost of the plan.
Shares in the company rose to a near 13-month high on
Thursday as the move will allow BT to charge broadband providers
more for premium services to help fund its investment. They were
up 0.9% in afternoon deals.
Chief Executive Philip Jansen said 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 will give companies flexibility on the
pricing of their fastest services for the long term, along with
measures to protect competition.
"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.
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.
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 said about 70% of British customers would have a
choice of gigabit networks.
UNLEASH INVESTMENT
The regulations, which apply for five years, allow BT to
keep the price it charges operators for entry-level 40 Mbit/s
broadband and slower copper flat and charge more for full fibre
services.
"This approach improves the investment case for BT and its
rivals by providing them with a margin to build the new
networks," Ofcom 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, including
3.2 million properties in rural areas.
The government plans to provide funding to help reach the
remaining 20% of properties.
"We will be publishing Project Gigabit very soon to explain
where we will be taking the best broadband connections first and
how we will tackle the hardest to reach premises as well,"
junior minister Matt Warman said on Thursday.
Alternative providers like Virgin Media and CityFibre are
building competing networks in 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.
He said Ofcom had stopped BT cutting prices in areas where
it faced competition without the regulator's approval.
The safeguard meant providers like TalkTalk, Sky and
Vodafone could move customers to CityFibre without
worry, he said.
Once fibre is in place, regulation on copper will be removed
so Openreach will not have to maintain two networks.
($1 = 0.7160 pounds)
(Additional reporting by Kate Holton; editing by Sarah Young,
Kate Holton and Emelia Sithole-Matarise)
Vodafone (VOD)
BT (BT.A)