BT: GBP10 billion national network upgrade delayed

14 Jan 2008

The Times reports that BT will fail to complete a GBP10 billion project to upgrade its network on time, with only a handful of a planned 350,000 lines already transferred in the pilot area. BT had hoped to complete the ambitious project by 2010, but it has been forced to push the deadline back by a year. It is understood to have transferred so far only a fraction of the 350,000 lines in Wales that it planned to move to the new network by the end of this summer. Rivals said that the problems were the result of BT being overly bullish about the highly complicated project, the first of its kind in the world. Questions have also been raised about whether the group placed too much focus on securing the cheapest possible deals with suppliers.

The new network – known as 21CN – was announced with much fanfare in 2004. BT said that it would allow the group to offer customers a plethora of new services, which could be launched much faster than on the existing network. The network was also intended to generate considerable savings for BT by significantly simplifying operations. BT predicted that the investment would enable it to deliver cash savings of GBP1 billion per year by 2008/09. BT has refused to confirm if it is still on track to meet that target, although it is known that savings that the telco has made in other areas of its business have been redirected to the 21CN project. An update is expected when BT announces third-quarter results next month.

United Kingdom, BT Group (incl. Openreach)