BT: UK gov will miss gigabit broadband target by eight years

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BT has warned that Boris Johnson's target for delivering gigabit broadband across the UK will be eight years late without reforms to business rates and tax.

The company estimates that the industry is on course to deliver gigabit-speed broadband by 2033, according to The Sunday Telegraph, which is significantly later than the prime minister's 2025 target.

Based on the current rollout pace, full-fibre broadband speeds would only reach 70% of UK homes and businesses by 2025, according to a report by Analysys Mason that was commissioned by BT.

The telecoms giant said that the full-fibre target can still be met by 2027, but only if the government makes changes to the way the sector is taxed. BT has previously pushed the government to cut business rates on new broadband networks by extending the current tax holiday from five to 20 years.

The extension could be worth around £1 billion to BT, the firm's chief executive Philip Jansen has said previously, but any changes to business rates won't be considered until 2023, the government has reportedly said.

"We must end the situation where BT and Virgin are actively penalised for investing in fibre, because they have to pay higher business rates on a fibre connection than they do on an older, much slower, copper one," said BT director of policy Alex Towers.

The report also recommended overhauling planning rules to allow engineers more land access and greater use of the latest digging equipment as standard. Along with changes to tax and business rates, the industry could save a total of £9 billion, the report suggests.

The government said it was "determined to deliver on our gigabit commitment", a spokesperson for the Department for Digital, Culture, Media and Sport said.

"[We] are already acting to remove the barriers to industry accelerating broadband rollout as well as investing £5bn so the hardest to reach areas aren't left behind," they said.

A Virgin Media spokesperson told IT Pro that it is "continuing to invest, upgrade and expand" its network to bring gigabit broadband to more than 15 million homes by the end of 2021. This, it said, will mean that Virgin Media will deliver around half of the government's total gigabit broadband ambition four years ahead of the 2025 target.

Bobby Hellard

Bobby Hellard is ITPro's Reviews Editor and has worked on CloudPro and ChannelPro since 2018. In his time at ITPro, Bobby has covered stories for all the major technology companies, such as Apple, Microsoft, Amazon and Facebook, and regularly attends industry-leading events such as AWS Re:Invent and Google Cloud Next.

Bobby mainly covers hardware reviews, but you will also recognize him as the face of many of our video reviews of laptops and smartphones.