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BT Ready To Invest £1.5 Billion Into UK Broadband

BT is ready and waiting to invest a substantial £1.5 billion into the next generation broadband service of the UK but is waiting for the go-ahead from OFCOM, the industry regulator. In a show of power, BT has said it will only be able to invest the funds if OFCOM looks favourably upon the company's request to increase wholesale broadband charges in the UK - the amount BT charge other broadband providers to lease their lines.

If the issue of pricing is resolved it looks as though over 10 million homes in the UK would have access to much faster broadband by 2012, with speeds in excess of 100 Mbps possible. The group is also willing to install fibre optic connections to a number of homes in the UK, ensuring that the vital last mile of cable is as quick and efficient as possible.

The move has been expected for some time and will be financed by the cancellation of the company's multi-billion pound share buy-back program. While some would say it has taken too long to arrive at this stage, the problem stems from a strict pricing structure installed by OFCOM some years ago which has been squeezing the profitability of BT's wholesale broadband service. Without profits from this operation there is no reason or possibility of BT investing substantial funds for the future.

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