BT's new network heralds engineer job carnage

Confirms ISP price cuts

BT says its new network technology, currently on trial in Wales, will allow it to slash its engineering staff by thousands.

The 21st Century Network (21CN) fibre optics, which BT is spending £10bn to lay nationwide by 2011, will ensure broadband customer service will improve, said Paul Reynolds, head of the firm's wholesale division in an interview with the Financial Times on Tuesday.

ADSL2+ is being rolled out at 21CN exchanges, which should offer speeds of 24Mbps. Reynolds said the trial, conducted in a couple of hundred homes in south Wales, had reported no faults and would generate £1bn in annual cost savings once turned on elsewhere. 21CN will use internet protocol for all voice traffic too.

BT, which made a pre-tax profit of £2.17bn last year, has not put a number on how many engineers are for the chop. Reynolds refused to be more specific than "several thousand", adding that some would find jobs elsewhere in the business.

The Communication Workers Union says 6,500 will go.

Network upgrade programmes in France and Germany are set to deliver speeds of up to 50Mbps. National incumbents on the continent are seeking to protect their investment from broadband competitors, invoking the ire of the European Commission, however.

BT said its network would deliver an equally rich "communications experience" to the French and German upgrades. At the launch of its video on demand service BT Vision in December, the telco was cagey about whether it would be able to deliver high definition TV, however.

In separate news, BT reaffirmed a series of broadband wholesale price cuts today. From 1 May, IPStream, which it sells to rival ISPs for consumers and businesses whose line has not been unbundled at the local exchange, will come down nine per cent per month. It'll now cost the ISP £6.39 for each line at wholesale. ®