Sky and EEF criticise BT's digital investment plans

5th May 2016 10:00

(ShareCast News) - BT's newly announced multi-billion-pound investment in the UK's broadband network has received stinging criticism from UK manufacturers and rival Sky over the continued use of legacy copper wire technology and the slow, uncertain pace of improvements to the nation's digital infrastructure.On Thursday morning BT announced plans to bring ultrafast broadband to a minimum of 10m homes and businesses by 2020, with an ambition to reach 12m.Around 2m of those premises will receive the fibre-to-the-premises (FTTP) broadband, while the remaining 10m will be served by upgrades to existing copper infrastructure.Even using the 'G.Fast' fibre-and-copper technology, industry experts said this would only help those living close to their local fibre cabinet.For its part, Sky, which along with fellow FTSE group TalkTalk and many other internet service providers uses the Openreach network for its broadband services, said BT's grand statements about helping the UK remain a "digital leader" were nothing of the sort."Today's statement shows that BT continues to see copper as the basis of its network for 21st century Britain," Sky said."Despite BT's claims, it is clearer than ever that their plans for fibre to the premise (FTTP) broadband will bypass almost every existing UK home."This limited ambition has been dragged out of BT by the threat of regulatory action, demonstrating once again why an independent Openreach, free to raise its own long-term capital, is the best way for the UK to get the fibre network it needs."BT chief executive Gavin Patterson said the investment was "subject to regulatory certainty", a reference to Sky and TalkTalk's long-repeated calls for watchdog Ofcom to force the former state monopoly to spin Openreach off as a separate company.The regulator's February review allowed BT to keep hold of the infrastructure business but suggested it would be forced to separate if it does not effectively open up the network to rivals and implement major reforms.Also on Thursday, EEF, the UK manufacturers' organisation, complained that the investment plans were not before time and said all industries needed more certainty about the UK's future digital infrastructure."Manufacturers have had to invest significantly in leased lines as a stop gap measure while the UK's digital infrastructure is slowly and, somewhat begrudgingly, brought up to be best in class," said the EE chief economist Lee Hopley."They've watched as households have been prioritised while business parks have been bypassed. Industry also remains perplexed by the lack of transparency surrounding the rollout of the superfast broadband programme.""As a result, while on the face of it today's announcement is a positive step in improving the UK's digital infrastructure, manufacturers will understandably wait to see how this rolls out on the ground."She also bemoaned the fact that BT was only appearing to pursue this "much needed" improvement to Britain's digital infrastructure "using only commercial interest"."As industry prepares to make significant investments in new internet connected capital equipment as part of the fourth industrial revolution, it will need the certainty about future digital infrastructure in the UK," Hopley added. "Government should put in place a business specific Universal Service Obligation to guarantee a level of service that can support that investment happening in Britain."According to TV and mobile advice site Cable.co.uk, the current Openreach network for many rural households was not "fit for purpose"."In extending its fibre network all the way to 2m UK homes, BT has the opportunity to help the some of the millions in the UK with broadband that isn't fit for purpose, primarily those in rural areas, but also anyone living more than 1,000 metres from their local fibre cabinet - if indeed they have one," said the site's telecoms expert Dan Howdle."BT absolutely must seize this opportunity, not only for the sake of those who suffer daily with appalling broadband speeds, but also for its own sake, since failure to do so may contribute towards a future in which it is forced to give up Openreach."BT's shares were up 2.8% to 451.83p just before 1100 BST on Thursday.