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BT chief admits there is 'more to do' in roll out of broadband service

BT has received £1.7 billion in taxpayers' money to improve services.

Published 23/01/2016

The report claims 5.7 million customers, especially in rural locations, have internet speeds so low they break regulations
The report claims 5.7 million customers, especially in rural locations, have internet speeds so low they break regulations

The chief executive of BT has admitted there is "more to do" in the roll out of Openreach's broadband service.

Appearing on Saturday's Today programme on BBC Radio 4, Gavin Patterson responded to a report by MPs that states m illions of broadband customers and businesses suffer "dire" connection speeds despite BT receiving £1.7 billion in taxpayers' money to improve services.

They are calling for the telecoms giant to be split from its Openreach subsidiary to end its "natural monopoly" over the nation's broadband infrastructure, amid claims 5.7 million customers, especially in rural locations, have internet speeds so low they break regulations.

The chief executive said: "Over 90% of the UK can get super fast broadband today - which means that 10% today cannot. Within the next 18 months that will only be 5% and we are working with the Government to find ways to address the last 5%."

He admitted in rural areas "there is more to do, there is no question about that".

"But even Department for Culture, Media and Sport and Ofcom have pointed out that we will get to 95% of the UK by the end of next year," he said.

The cross-party report carries the signatures of 121 MPs, including former Tory cabinet minister Grant Shapps, Lib Dem former Scottish Secretary Alistair Carmichael, Labour MP Helen Goodman and Ukip's Douglas Carswell.

It concluded: "Unless BT and Openreach are formally separated to become two entirely independent companies little will change. They will continue to paper over gaping cracks.

"Whilst rural SMEs (small and medium-sized enterprises) and consumers are left with dire speeds, or even no service at all, Openreach makes vast profits and finds little reason to invest in the network, install new lines or even fix faults in a properly timely manner."

On the show Mr Patterson said splitting the local loop from the rest of a telecoms company is a risk, especially when it has been tried unsuccessfully elsewhere in the world.

"It is not a recipe for success. It will create huge uncertainty and it will make a weaker company that would be vulnerable to takeover and and would certainly not be in the position to invest in the sort of way we have over the last five years," he said.

BT is in the process of acquiring mobile provider EE - meaning they will control 40% of the telecom market.

Mr Patterson said: "We take it (the report) very very seriously which is why we will look at this in a lot of detail and will write to every single MP, not just the ones in this list, but all the MPs across all the parties to explain exactly what the conditions and the services are in their constituencies."

The MPs' report called for a "bold and comprehensive solution", adding: "Openreach has so far received £1.7 billion in taxpayer subsidies to connect harder-to-reach areas of the UK to superfast services, but has repeatedly failed to deliver."

It is the first report by the British Infrastructure Group (BIG) set up by Mr Shapps.

He wrote: "With the UK economy now so reliant on its internet infrastructure, this BIG report contends that our future is being held back by systemic underinvestment stemming from the 'natural monopoly' of BT and Openreach."

The company's alleged failure to improve ageing digital infrastructure that still largely relies on outdated copper cables was blamed for "stifling" the economy at a cost of billions each year.

Responding to claims that using copper is out of date, Mr Patterson said: "We have been able to see significant technological breakthroughs with copper over the last five years.

"I think fibre is part of the future and we have already got more fibre to the premise lines than anyone else in the UK.

"But we have to recognise it is not affordable if you want to get coverage across the whole of the UK. Some of the more remote parts of the UK it is never going to pay back, which is why you have to use a blend of technologies."

Using data from the Office for National Statistics, report researchers found around 5.7 million broadband customers had internet connections that do not reach Ofcom's "acceptable" minimum speed of 10Mbit/s, around 3.5 million of whom live in rural areas.

A review by the regulator had found 42% of SMEs reported experiencing problems with their internet connectivity and 29% suffered from poor service reliability, costing the economy £11bn a year, the BIG said.

BT said it took any criticism seriously, but described the report as "misleading and ill-judged", claiming the proposal to break apart the business was "wrong-headed", while a Government spokesman labelled the figures "entirely misleading".

A spokesman for the Department for Culture, Media and Sport said its superfast broadband programme is "on track and under budget".

Shadow culture secretary Maria Eagle said: "This cross-party report shows again that the Tory Government is letting down millions of households and businesses over its roll out of high speed broadband.

"Tory ministers talk a lot about the global race, but as this report makes clear, the UK is now falling behind many of its international competitors when it comes to access to broadband.

"Whilst we await the outcome of the Ofcom review into BT Openreach, this report shows just how far the Government still has to go to keep its promises on rolling out broadband."

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