Building Britain’s next generation of super-fast broadband network, which can download music in seconds and movies in minutes, will cost between £5.1bn and £28.8bn, according to the government’s independent advisory group.

The estimate from the Broadband Stakeholder Group, published today, comes before reports on next-generation access networks by government-appointed adviser and former Cable & Wireless boss Francesco Caio and regulator Ofcom next week.

BT will spend £1.5bn rolling out the sort of fibre-optic network needed to achieve the speeds common in Korea and Japan to 10m homes over the next four years.

Virgin Media, meanwhile, is installing technology that provides broadband at more than twice the speed possible on BT’s best broadband line. But it will only ever reach about half the country.

The BSG report reckons that the technology that BT plans to deploy in cities - which only connects cabinets at the end of streets to the new network - will cost £5.1bn. Stretching the fibre networks all the way into every home in the country could cost £28.8bn.

Anthony Walker, chief executive of the BSG, said the main cost of the project is digging up the nation’s roads to bury fibre, and the economic case for such deployment - based on take-up of about 30% of potential homes - can relatively easily be made for about 70% of the country.

It is highly unlikely that the government will provide any financial help to plug the digital divide that looks set to appear between urban and rural areas.

In a recent interview with Television, the monthly magazine of the Royal Television Society, Caio, who was asked by the Department for Business, Enterprise and Regulatory Reform to investigate next-generation networks, said he was minded to advise the government that it leaves the job to the market rather than recommend state intervention.

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