BT to splash out billions so millions get super-fast broadband

• Chief Executive Ian Livingston at BT Centre in London as full year results are given. Picture: PA Wire

About four million homes are expected to have access to fibre broadband by the end of 2010, but BT said yesterday it hoped investment of 2.5bn would dramatically increase this figure in the next five years.

The group was previously to have spent 1.5bn in making super-fast download speeds available to 40 per cent of homes by 2012.

The pledge was made by chief executive Ian Livingston as BT cheered the stock market with a 1bn headline pre-tax profit compared with a 244 million loss after a raft of exceptional charges last time.

BT's shares topped the FTSE risers' board, jumping 10.9 per cent to 133.6p as Livingston's three-year growth plans were well received in the City.

The faster broadband will support BT's plans to grow its television offering, which is based on its on-demand digital TV service, BT Vision. The regulator's recent move to lower the wholesale cost of pay-TV programming means that BT expects to offer Sky Sports 1 and 2 in time for the start of the football season in August.

Livingston said the Sky package would be priced competitively at under 20 a month, as consumers would not need to buy other Sky channels as part of any deal. "We know it's a hole (the lack of Sky and ESPN football coverage] in our proposition at the minute," he said.

Asked how he felt Sky would respond, Livingston said: "We don't think Sky will take it lying down at all. I think they will be very, very aggressive."

But the BT boss added that the group's expansion in television mirrored Sky's move into broadband. He said there were no targets for customer numbers yet.

BT said it reduced operating costs by 7 per cent in the year to end-March after it cut 20,000 jobs, following 15,000 redundancies in the previous year. There was no Scottish breakdown of job losses although a group spokesman said the figure was "no huge difference" and the group still employs some 8,000 people in Scotland.

Livingston, unveiling revenues down 2 per cent at 20.8bn, predicted the company would return to growth in 2012-13, partly helped by expansion in corporate services in Asia that would benefit BT's Global Services arm. He said: "This will be the decade of the Asian multi-national." The group would be able to provide the secure global networks the new Asian business giants needed, Livingston said. Global Services reduced its losses to 358m from 2.1bn.

BT's dividend has risen to 6 per cent to 6.9p.