Gigabit broadband for all by 2025? More like 2033, warns BT

It has been around a year since UK Prime Minister Boris Johnson announced his goal of gigabit broadband coverage of the entirety of the UK by 2025 and, while much progress has been made, there is still much to be done to reach this ambitious target. 

 

Too much in fact, says BT, with CEO Philip Jansen yesterday saying that the industry in its current state will only be able to meet this goal by 2033, based on a commissioned report. He did offer some hope however, saying that the target could be reached by 2027 – still notably two years short of the government’s initial target – if around £9 billion of tax and red tape is waived.

 

Currently, around a quarter of the UK’s premises have access to gigabit broadband, with commercial fibre rollout expected to roughly triple this percentage by 2025. However, as always it will be the final percentiles that will be the hardest to reach and it is these that will present the operators the biggest challenge over the coming years. 

 

In order to reach these final premises, BT’s report argued for major reforms in legislation, from increasing engineers land access to having local authorities permit the use of the latest digging equipment. 

 

Business rates were perhaps the largest point of contention. The operator has been pressing the government to extend the current tax holiday from five to twenty years, a move which would save the company around £1 billion. 

 

“We must end the situation where BT and Virgin are actively penalised for investing in fibre, because they have to pay higher business rates on a fibre connection than they do on an older, much slower, copper one,” said Alex Towers, BT’s director of policy.

 

The government, however, has reportedly stated that they would not reconsider business rates until 2023.

 

In total, the measures suggested by the report would save the industry an estimated £9 billion, allowing the government’s full coverage targets to be achieved be 2027.

 

It should be remembered, however, that as the largest fixed line operator in the UK, a pessimistic outlook from BT here is somewhat to be expected, hoping to push the government to move favourable regulatory terms. While the target is certainly ambitious, some players still consider it achievable.

 

“We do not share BT’s pessimism about the speed of fibre rollout across the UK.  The Prime Minister’s target of delivering gigabit-capable connectivity to 100% of the UK by 2025 is certainly an ambitious goal, but it is definitely achievable, assuming a flexible and pragmatic approach to the technology, business models and interventions that are employed,” said Michael Armitage, CEO Broadway Partners.

 

“This is not about an extension to the moratorium on fibre rates, but about harnessing the power of fibre and 5G in combination, about harnessing the energy and creativity of multiple smaller suppliers, and about engaging the public and private sectors in risk-sharing, non-market-distorting partnerships.”