Telecoms giant BT Group today suspended its £2.5 billion share buyback programme to spend £1.5 billion rolling out a super-fast broadband network providing 10 million homes access to fibre within four years.

In his first major move since taking the reins at BT this month, chief executive Ian Livingston said the investment would provide British households with faster broadband speeds than ever before.

BT's shares fell almost 4 per cent in early trading to 195p, their lowest for nearly three years.

BT said the £2.5 billion share buyback programme, announced last May, would be suspended from July 31, in order to pay for the additional investment but the telecoms group said there was no danger that it would cut its promised dividend.

Mr Livingston, 43, who succeeded former cheif executive Ben Verwaayen this month, said the super-fast broadband would deliver speeds of up to 100 megabits per second through fibre cables.

He said in a statement: “We now want to make a step-change in broadband provision which will offer faster speeds than ever before. This marks the beginning of a new chapter in Britain’s broadband story."

“We want to work with local and regional bodies to decide where and when we should focus the deployment. Our aim is that urban and rural areas alike will benefit from our investment”.

Mr Livingston said a "supportive and enduring regulatory environment" was essential to deliver broadband to 10 million households. BT is holding discussions with Ofcom on ways to deliver the programme. BT said these included removing barriers to investment and ensuring a "fair" rate of return for investing in broadband.

BT said fibre-based super-fast broadband would give customers enough speed to run multiple bandwidth-hungry applications. "For example, some members of a family could be watching different high definition movies while others were gaming or working on complex graphics or video projects," the statement said.

BT provides fibre to the premises of more than 120,000 businesses, and has deployed more than 10 million kilometres of fibre in the network.

Mr Livingston is set for rewards of almost £7 million in his first year as chief executive of BT if he meets targets of a new incentive scheme.

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