BT unveils expansion of superfast broadband plans

About four million homes are expected to have access to fibre broadband by the end of this year, but the group hopes that investment of around 2.5bn will dramatically increase this figure in the next five years.

It had previously undertaken to invest 1.5bn in making super-fast download speeds available to 40 per cent of homes by 2012.

The pledge was unveiled by chief executive Ian Livingston as he announced group profits of 1bn for the year to March 31 and set out his objectives for the telecoms firm over the next three years.

The faster broadband will support BT's plans to grow its television offering, which is currently based around its on-demand digital TV service BT Vision.

The regulator's recent move to lower the wholesale cost of pay television programming means that BT expects to offer Sky Sports 1 and 2 in time for the start of the new football season in August.

Mr Livingston said efficiency improvements had allowed BT to accelerate its growth plans. The 2.5bn investment in fibre is one of the largest in the world that does not rely on public sector funding and where the network is open to all service providers on an equal basis.

BT said it reduced operating costs by seven per cent in the last year after it cut 20,000 jobs in the period to March 31 – 5,000 more than expected. The majority of the reduction comprised agency staff and contractors and it came after a 15,000 cut in the previous year.

The company is still one of the UK's biggest employers with a workforce of about 128,000.

The cost savings helped BT recover from the loss of 244m in 2008-09, when the company was blighted by problems at its division providing IT

networking services for clients such as the NHS and Nationwide.

The global services arm is under new leadership and has taken a more rigorous approach to new contracts after previous deals were based on over-optimistic assumptions.