Johnson Poised to Unveil as Much as $6 Billion in Broadband Fund

(Bloomberg) -- U.K. Prime Minister Boris Johnson is set to announce as much as 5 billion pounds ($6.2 billion) in government funding for faster telecom networks, according to a person familiar with the matter.

The spending could be revealed at the ruling Conservative Party’s conference in Manchester this week, and would subsidize infrastructure including fiber optic connections to improve broadband in remote parts of Britain, said an official who declined to be identified as the plans are still confidential.

The money would be put towards delivering a key pledge from Johnson’s recent campaign to lead the Conservative Party, many of whose voters live in rural areas. He promised to accelerate his predecessor’s ambition to hook up every property in the country to fiber optic broadband, aiming for 2025, eight years earlier than the previous goal.

The Sunday Telegraph newspaper first reported the latest funding. Earlier this month Culture Secretary Nicky Morgan convened broadband executives to work out details, with bosses attending from former state monopoly BT Group Plc, Liberty Global Plc’s Virgin Media, and alternative networks such as Goldman Sachs Group Inc.-owned CityFibre Ltd.

Gaps in the plans include how to avoid a wasteful building war, in which companies chase densely-populated, profitable areas and leave sparser regions behind. About a 10th of Britain’s homes and businesses could need state support because connecting them is not commercially viable, according to a government review published last year.

The government’s stated goal of fiber optic connections for the whole country has been moderated and officials now talk about “gigabit-capable” connections, a shift that allows for technologies like wireless 5G and Virgin Media’s coaxial cable. The U.K. lags European neighbors in full fiber, which reaches only 8% of British premises compared to about 90% of homes in Portugal and 70% in Spain

To contact the reporters on this story: Thomas Seal in London at tseal@bloomberg.net;Alex Morales in London at amorales2@bloomberg.net

To contact the editors responsible for this story: Thomas Pfeiffer at tpfeiffer3@bloomberg.net, Marion Dakers, Sara Marley

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