BT may increase fibre coverage with 50p tax
BT is examining its fibre to the cabinet roll out plans and considering increasing coverage to 90% of homes after details of the planned 50p tax on phone lines was revealed in Lord Carter's Digital Britain report on Tuesday.
The report set a target for at least 90% of homes and businesses to have access to high-speed broadband by 2017 with the £6 a year (50p a month) levy planned for every fixed phone line which will contribute to a 'Next Generation Fund' to help the final third of the country to get access to these faster services.
"We're keen to get fibre to as many homes as possible - and so the levy is a positive step towards increasing availability. The devil will be in the detail, but, if the plans are workable, then it could be feasible that we [would] deliver somewhere in the region of 90 per cent coverage."Ian Livingstone, (CEO) BT Group
BT's current fibre roll out is in trials in London and Wales but is expected to be deployed to cover 40% of homes by 2012, costing an estimated £1.5bn. UBS analysts estimate it could cost them a further £3bn to get to 90%.
Other providers are less sure that the 50p levy is a good idea.
"A tax on fixed lines is the wrong solution, penalising existing customers and conflicting with the government's stated objective of driving broadband take-up."
"With equal access to infrastructure and evidence of consumer demand, we would back ourselves to compete successfully, just as we have done since entering the broadband marketplace three years ago."BSkyB statement
Analysts suggest that the increased rollout would be bad for Sky as they could lose some of their valuable pay-TV subscribers to rivals who could provide similar services over a next-generation broadband service.
Carphone Warehouse are also wary, advising that the government will have to consult and justify the tax before being able to make it law.