BT Openreach unleashes $16.8B fiber plan after Ofcom ruling

Openreach superfast broadband
BT Openreach quickly confirmed Ofcom's view that keeping wholesale pricing flat will encourage more fiber investment. (BT)

BT said Thursday it would "build like fury" to expand fiber broadband services to 20 million homes in the U.K. after British regulator Ofcom issued a ruling that will keep the operator free from further wholesale pricing regulation, according to news first reported by Reuters.

The ruling allows BT Openreach to take a more ambitious stance on its 12 billion-pound ($16.8 billion) effort to reach the 20 million homes goal by the middle to latter part of this decade. Its goal for the end of this month was to have about 4.5 million of those homes connected.

Ofcom, for its part, said in a statement on its ruling, “Over the last few years, we have brought down the wholesale price Openreach charges retail providers for its entry-level (40 Mbit/s) superfast copper broadband service, in line with its falling costs. We are now keeping this price – and the prices of slower copper broadband packages – flat in real terms.”

RELATED: Openreach connects first fiber customer using Adtran’s GPON solution

Ofcom further stated, “Openreach can also charge a bit more for regulated products that are delivered over full fibre instead of copper. This reflects the fact that full fibre is consistently faster, and much more reliable, than copper-based broadband.” 

The regulator argued that its policies will strengthen the economic case for BT and other operators to continue investing in and upgrading their networks. “We recognise that full fibre is a long-term investment, taking more than a decade – if not two – to pay back. So, we aim to allow all companies the opportunity to achieve a fair return over their whole investment period, and do not expect to introduce cost-based prices for fibre services for at least ten years.”

This news comes less than a week after Openreach rival CityFibre announced plans to extend its fiber reach to three million more homes in 216 towns and villages across the U.K. CityFibre last year acquired FibreNation to boost its broadband strategy.