BT’s fibre optic plans anger competitors

BT has announced plans to triple its investment in fibre optic cables, making high speed internet access available to millions of homes.

£1.5 billion investment is needed from the company to make lightening speed fiber optic broadband available to 10 million homes by 2012.

Speeds of up to 100mps - 50 times the current average connection speed - would mean that customers could download high definition TV programmes direct to their computer.

BT said that it will fund the investment by suspending its share buyback programme, a move that has drawn criticism from shareholders and competitors.

Charles Dunstone, CEO of Carphone Warehouse, provider of TalkTalk broadband, said the announcement is merely an excuse for BT to halt its share buyback program.

Dunstone added that broadband distributed over copper telephone wires has a long term future, with speeds of up to 25mbs over copper wire feasible in the near future.

TalkTalk is likely to lose out from BT’s investment in fibre optics as it is probable that BT would no longer let the company piggyback on its service once fibre optics are fully installed.

A spokesperson for Virgin Media also hit out against the plans, saying that the company already provides fibre optic broadband.

Virgin Media will make broadband speeds of up 50mbs available to its customers by 2009, and speeds of up to 200mbs will be achieved by 2012.