BT has announced what it calls the most advanced transformation of any carrier’s underlying network.

Paul Reynolds, CEO of BT Wholesale, said that the 21st Century Network (21CN) initiative, transforming the PSTN to an IP infrastructure, was the “best story” in the telecoms world and promised that users would benefit from a whole range of new services (see our feature Why Choose IP Telephony?).

Reynolds said that the roll-out of the IP infrastructure would start next year and would be completed by 2009, when 99.6% of BT’s customers would have access to the new infrastructure. He said that the first customers could be connected by January 2005.

Perhaps more importantly for BT, he said that the transformation would mean cost savings to BT of about a £1 billion a year by 2009. Reynolds said that some of these would be passed on to customers although he wouldn’t commit himself on what sort of cost savings users could expect, although he said that prices would continue to come down.

The IP infrastructure would mean a simplification of BT services and the reduction of multiple billing where voice and various data services are billed separately. "We’re already seeing different services being included on the same bill. That will continue."

But customers expecting unlimited bandwidth for their services will be disappointed. "We’re not about chucking speed for the sake of it," said Reynolds.

BT has also announced a trial that would explore 'deep fibre' technology, rolling out fibre to the premises, at Milton Keynes, London Docklands and Martlesham, Suffolk (the site of the BT labs).

One new area to be explored by BT will be development of entertainment over the BT network but Reynolds dismissed fears that the company would be competing with the cable companies. "This is not about a primitive technology like cable," he scoffed.

All well and good then although one worrying aspect is that BT has made its announcement before the trials, indeed before it has completed the tendering process. Reynolds said that BT was set to meet 50 suppliers to see who would be its partners on the project. Let’s hope that this doesn’t turn out to be the telecoms equivalent of Wembley Stadium then.

Reynolds' presentation can be found here. More details can be found here.