BT Unveils $3B FTTx Plan
But despite the large capex figure and apparent broadband breakthrough for the U.K. -- a fiber-access-poor residential market compared with many of its European peers -- the news is deemed somewhat disappointing by at least one industry analyst, who describes BT's strategy as "cautious."
BT's plan: the details
The British incumbent plans to invest £1.5 billion by the end of March 2013 to take what BT calls "super-fast broadband" to as many as 10 million U.K. homes (about 40 percent of the total) in urban and rural areas, though the actual commitment and deployment are dependent on agreements being reached with U.K. regulator Ofcom (of which more later). The operator says the move will deliver downlink connections of up to 100 Mbit/s to support services such as multiple HD TV streams and HD gaming and videoconferencing. BT says uplink speeds will be "substantial."
Most of the rollout will be fiber-to-the-curb (FTTC), with the final connection to the home being a VDSL2 service over copper that can deliver up to 40 Mbit/s. FTTP will be rolled out mostly in new-build, greenfield areas, such as the housing development in Southeast England, where BT is installing fiber access technology, and in the Olympic Village that's being built outside London for the 2012 Olympic Games. (See BT Goes With Huawei for FTTH .)
A BT spokesman says the likely technology choice for FTTP will be GPON -- much in the news at present -- though the carrier "is not ruling out point-to-point fiber access." (See PON-derous! and ECI Touts GPON Advance.)
The deployments will be spread around the U.K., with the rollout plans being influenced by the level of support BT gets from local and regional authorities.
The other 60 percent of the U.K.'s homes will get ADSL2+ services from BT, which provides downlink speeds of up to 24 Mbit/s.
The carrier says no technology tender documents have been issued yet: "It's too early for that," says a spokesman.
The planned £1.5 billion investment includes £1 billion ($2 billion) of new capital expenditure, and £500 million ($1 billion) of funds already earmarked for fiber deployments -- BT provides fiber access to enterprise customers, with 120,000 businesses already connected.
The operator expects to spend £100 million ($200 million) incremental capex in the current financial year (to the end of March 2009) and the next fiscal year (to March 2010), taking the operator's total planned capex budgets for those years to £3.2 billion and £3.1 billion ($6.4 billion and $6.2 billion), respectively. The remaining £800 million ($1.6 billion) of incremental capex will be spent during the following three financial years.
To support the additional investment, BT is suspending its current buyback program from the end of July: The carrier says it will have returned more than £1.8 billion ($3.6 billion) of the planned £2.5 billion ($5 billion) buyback target to investors by that time. BT is, though, retaining its dividend scheme, and expects dividends to grow during the current financial year.
News of the buyback suspension and planned capex splurge knocked 8.4 pence, about 4 percent, off BT's share price today, sending it down to 193.6 pence on the London Stock Exchange .
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