Technology: Companies

BT pledges major upgrade to broadband network


British multinational telecommunications provider BT has vowed to upgrade its Internet broadband network in the U.K after competitors accused the group of hampering competition and poor customer service.

BT chief executive, Gavin Patterson, said the FTSE 100 stalwart was targeting new minimum broadband speeds of 5-10 megabits per second as it planned to extend its "Openreach" fiber network.

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"We should be under no illusions, the network requires investment if we want to stay ahead as an internet based economy, there is no two ways about that," Patterson told CNBC on Tuesday.

BT is awaiting the outcome of a review by regulators into whether Openreach should be split off into a separate company. Rivals have pushed for the Openreach network to be spun off, saying the current system limits competitor access, creating an unfair advantage and allowing BT to set prices too high.

Rival U.K. Internet providers Sky, TalkTalk and Vodafone all rely on BT's Openreach fiber and copper networks to provide broadband connections to customers, while Virgin Media operates its own network.

"With respect to service, I think we should take their comments with a pinch of salt, there is a bit of a self-serving nature to them," Patterson told CNBC, referring to criticisms made by rivals in an open letter in the Financial Times newspaper on Monday.

Patterson said spinning off Openreach was not the "right model" for the U.K. and there was "no evidence anywhere around the world that there is a better model than the one we have got."

A report from KPMG commissioned by BT said its investment program in fast broadband would add £20 billion to £30 billion to the U.K. economy over the next decade.

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