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Last Updated: Wednesday, 9 June, 2004, 14:16 GMT 15:16 UK
BT transforms phone network
Woman using telephone
Customers will not notice any change for a while
BT is planning to rebuild its phone network in the UK in a radical move that will cost billions.

It could change the way people use their phones and allow most people with a BT phone line to plug into broadband using computers, mobiles or other devices.

It could also mean that mobiles and fixed lines become interchangeable, with the same number and bill.

BT plans to convert the majority of its customers to the new network by 2009.

Undetectable

Customers who want to can switch to broadband themselves and plug any device into the network
Paul Reynolds, BT Wholesale
Dubbed the 21st century network, the technical work requires a gradual closing down of the old Public Switched Telephone network (PSTN) to make way for an internet protocol (IP) network.

BT will spend around 10bn on the project - more than the annual spend on Britain's main roads - and is hoping that a raft of new services will be possible on the back of it.

The switchover should be undetectable to its customers.

"We anticipate that millions of people will use the phone in the same way," said Paul Reynolds, chief executive of BT Wholesale.

"But customers who want to can switch to broadband themselves and plug any device into the network. The strategy is based on the idea of broadband everywhere," he said.

Savings

TIMETABLE OF CHANGE
2004 - fibre optic trial
2005 - Broadband available to 99.6%
2006 - Mass migration to IP network
2009 - network available to most customers
BT will begin trials of the IP network in 18 exchanges in London, Kent and East Anglia.

By January 2005, 1,000 customers will be connected. This will rise to 3,000 by June 2005 and major rollouts to all regions will begin in 2006.

BT believes the new IP-based network will be a lot simpler than the PSTN one and is hoping to make around 1bn saving per year by the time the network is complete.

Fast fibre

For the lucky few BT is also trialling the use of fibre instead of copper, which will offer customers super-fast broadband speeds.

Around 1,500 customers in Suffolk, Milton Keynes and Docklands will be selected to take part in the fibre trial which will be up and running in the autumn.

Despite speculation about the benefits of a ubiquitous fibre network, BT has no plans to lay it throughout the UK, concentrating instead on areas where new houses are being built.

Matt Beal, the man charged with heading up the conversion to the 21st century network, admits that this could create a new digital divide.

"There is that risk but complete conversion is not possible," he said.

He outlined some of the advantages of the 21st century network for customers.

"They could set up conference calls with their families, have video streaming and voice-activated phones," he told BBC News Online.

Cheap calls?

Another advantage will be the ability to bypass the phone network entirely and make cheaper calls over the internet.

This could severely dent BT's revenues but the telecommunications firm is remaining upbeat, describing internet telephony as "an opportunity not a threat".

Mr Beal hinted, however, that the cheap broadband telephony deals available at the moment may not continue.

"The charging model of today may not be realistic in five years time," he said.


SEE ALSO:
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Internet helps lift BT earnings
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BT set to reduce broadband charge
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10 May 04  |  Cambridgeshire
BT reveals phones meltdown cause
10 May 04  |  Manchester



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