In a recent development, BT head, Sir Christopher Bland, has indicated that his company hopes to be able to provide customers with broadband speeds of between 40 and 50MB per second in the not-too-distant future. His assertion came in a recent interview with the Financial Times. Whilst the telecoms giant has not taken a firm decision on the matter yet, Sir Christopher told the FT that it was a "likely development going forward." With current broadband speeds often at a meagre 8MB/s, supporters of the scheme hope it will help to improve the poor nature of internet provision in the UK.
BT expects to be able to offer the service by improving current broadband provision systems. Fibre optic cables are to be installed between BT exchanges and so-called 'street cabinets' to which households are connected. In broadband jargon, this practice is known as VDSL2, or 'very high-speed digital subscriber line 2'. In addition, faster broadband speeds will allow BT to gain a foothold within the high-definition television and internet television on-demand sector. BT would thereby provide competition to the likes of Virgin Media and Sky. However, according to one analyst, this would require BT to "make significant in-roads (into the market) in a short enough period of time."
Despite BT's proposals, broadband speeds are still likely to be lower compared to speeds abroad. Japanese, Finnish and Swedish consumers, for example, enjoy broadband speeds of up 100 MB as a result of high quality fibre optic networks. Another issue of concern is the potential cost of this program. Developing a viable fibre optics network is likely to be expensive – some have estimated the cost to be a whopping £4 billion. Additional costs will invariably be passed on to the consumer in the form of higher prices.
Regardless of these misgivings, however, the need to improve Britain's broadband infrastructure is essential. As a recent study by the Organisation for Economic Co-operation and Development (OECD) revealed, raising broadband speeds will provide long-term gains to telecom companies. Currently, the majority of British broadband subscribers are served via networks, constructed, in the main, from aging copper wires. Fibre optic cables will therefore serve to replace existing wires as well as helping to increase connection speeds. There will be added benefits for the consumer as well. At the moment, those homes or offices located a considerable distance away from BT exchanges face extremely slow connection speeds. Fibre optic cables, however, will allow all consumers to receive identical connection speeds regardless of their location. And, as for those consumers worried about the potential cost of the program, market insiders urge customers to bear in mind the fact that Britain's broadband market is highly competitive. Services provided by one provider will quickly by copied by other companies, bringing prices down in the process.
The BT initiative is clearly a step in the right direction as broadband provision in the UK currently lags far behind other developed countries. However, unless the program remains cost effective, it is unlikely to receive significant support from consumers.
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