BT plan for 300mb 'ultra-fast' broadband next year after new customers help profits
New deal: Ultra-fast broadband will be available on-demand in parts of the country where BT has already rolled out superfast broadband
BT is looking to woo customers with 'ultra-fast' broadband internet
speeds by installing fibre cables between cabinets on streets and their
homes and businesses.
The best broadband connections are advertised as achieving speeds of around 40Mb (megabits per second), but most of the country achieve a typical speed of just 7.6Mb.
BT today
announced a much faster 300Mb service will be available from spring
2013.
The roll-out, through BT's infrastructure division Openreach, will also
see the ultra-fast service made available through other providers such
as Sky.
Ultra-fast broadband is likely to be
most useful to small businesses and will be available on-demand in parts
of the country where BT has already rolled out superfast broadband.
The company said
some seven million businesses and households can now access superfast
broadband over its network as it replaces slower copper cables with much
faster fibres between its exchanges and cabinets on the street.
But
speeds have been limited so far because the cables that connect homes
and businesses to the cabinets are typically still copper. It has now
offered to run additional fibre to a home or business on demand to speed
up the final link in the connection.
BT confirmed plans to double download
speeds for its own customers for areas that have superfast broadband to
80Mb by the spring. It had previously said it would happen in coming
months.
The
announcement on new broadband speeds came as BT revealed an 18 per cent rise in underlying
profits to 628million in the three months to December 31 as it
continued to keep a tight lid on costs.
More
than 250,000 homes and businesses signed up to its broadband network in
the quarter, with BT Retail winning 56 per cent of these and
competitors such as Sky and TalkTalk accounting for the rest.
Its
BT Infinity superfast broadband package added 95,000 customers while BT
Vision, its TV on-demand service, added 39,000 new customers, bringing
total customers to 680,000.
Shares in BT were 2.8p higher at 208.7p in early morning trading.
The roll-out of BT's ultra-fast broadband service follows a successful trial in St Agnes, Cornwall.
Openreach chief executive Olivia Garfield said the new initiative was 'a significant development for broadband Britain'.
She added: 'Essentially, it could make our fastest speeds available wherever we deploy fibre.
'This
will be welcome news for small businesses who may wish to benefit from
the competitive advantage that such speeds provide.'
BT
is rapidly expanding its broadband network and recently said that
two-thirds of households in the UK will have superfast broadband by the
end of 2014.
Rival Virgin
Media has also recently announced that customers with speeds of between
10Mb and 50Mb will be able to double their speeds as the fight for
broadband customers hots up.
View from the City
'We
can’t help feeling the stock has already arrived,' said Mark James of
Liberum Capital. 'BT has outperformed the FTSE by around 15 per cent in
the last 12 months, outperforming Vodafone by a similar amount.
'Ultimately,
we think there is better value elsewhere in the sector. BT to our mind
is expensive versus its peers, and upside to shareholder returns is
likely to be constrained by the pension deficit (IAS [International
Accounting Standards] numbers increased from 2.5billion at the end of
the second quarter to over 4billion).
John
Karidis of Oriel Securities said: 'We believe consensus forecasts
exclude extra value from the wholesale of fibre access. We think BT is
worth 250p/share excluding this; around 300p including fibre.
'We will upgrade on evidence that Sky and TalkTalk start retailing fibre actively. We think this will happen by this summer.'
Stock trend: BT shares took a dive last summer but have since staged a recovery
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