BT raises doubts over £1.5 billion fibre investment

Posted on 17 Nov 2008 at 15:00

BT may shelve plans to invest £1.5 billion in high-speed, fibre optic broadband networks, after shareholders raised concerns about spending that much money in the current economic climate.

Chief executive Ian Livingston revealed that he had been contacted by shareholders who think that the telecommunications firm should hold onto the money, amid concerns that it will not be able to recoup a decent return on the investment.

Livingston said that he still believes that BT should make the investment, which he announced shortly after becoming chief executive, but echoed the shareholders’ concerns.

“‘But we need to have the environment in which our shareholders feel there is a good chance of us making a return,” he said. “If we cannot have that environment this is not the time to be taking on sure-fire losses.”

That puts the onus on Ofcom to ensure that BT can make money on the network while allowing equal access to rival ISPs.

Ofcom began its consultation process in September with the aim of both encouraging investment in fast, fibre optic networks and ensuring a competitive environment. Livingston’s comments suggest that BT may feel that in the current climate the two are incompatible.

Last week BT announced that is to lay off 4,000 of its own staff 6,000 contractors in order to reduce operating costs by £1.25 billion.

Author: Simon Aughton

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