The success of super-fast broadband is crucial to the telecoms group, which is grappling with deep problems in its Global Services business and an ageing copper-based phone network. BT must persuade customers and investors it has a credible revival strategy in place.

The ultra-fast network offers download speeds of up to 100 megabits per second (mbps). Steve Robertson, the executive running BT’s Openreach subsidiary responsible for the new network, said the company was ramping up the reach of the network after finding out it would not cost as much previously thought. He said the modified strategy would not increase the cost of the £1.5bn network.

Robertson claims that consumers will jump at the chance to use a network that will transmit high-definition television and sophisticated interactive games. BT says it has received positive feedback from trials of the new network in London and South Wales.

BT’s existing fixed-line broadband network, based on copper wires, is being stretched to the limit by the increasing popularity of watching video over the internet, led by the BBC’s iPlayer and Google’s YouTube.

So the company is planning a £1.5bn super-fast network based on fibre optic cable that should increase download speeds by at least 10 times the current industry average. The network is set to cover 10 million homes, or 40% of households, by 2012.

But as well as hoping that millions of households will want super-fast broadband, BT is betting that consumers are also willing to pay a premium for it.

Some analysts are optimistic, and think BT’s network plans neatly fit in with its fledgling pay-television service, which broadcasts videos over the internet, but others are not so sure that customers are willing to pay more during the recession. They are not bullish about BT’s network plans, and point to the competitive threat from Virgin Media, the cable TV operator. Virgin last year began offering download speeds of up to 50 megabits per second. BT’s existing copper-based network currently offers speeds of up to 20 mbps.

Ian Watt, at Enders Analysis, said BT’s new, faster network will be a “worthwhile defensive move in the longer term” but “its high cost and the limited number of customers willing to pay more for it, given alternatives such as cable, mean its impact on shareholder value is likely to be very modest”. BT’s plans for a super-fast broadband network were the first large initiative by Ian Livingston, the Scot who became the company’s chief executive in June 2008.

He repeatedly warned that some shareholders were sceptical about the case for spending £1.5bn on the network. BT is sticking to the £1.5bn budget, but Robertson is now outlining plans for more homes to be able to tap the highest possible download speeds available.

About 2.5 million homes will be able to get speeds of up to 100 mbps. Under BT’s original plans, only one million homes would have been able to get such speeds.

The key change is that some homes that currently use BT’s copper-based network will be offered broadband speeds of up to 100 mbps. Previously, BT had said that only homes in new developments, with no existing communications infrastructure, would get such speeds.

The government has said a good broadband services is “vital for jobs, growth and competitiveness”. It is keen to see BT introduce its superfast broadband network, because of concern that UK download speeds lag behind those of many other countries, including many of Britain’s European neighbours.

Critics of the BT plan have pointed out that will be available mainly in urban areas, leaving the countryside without top broadband services.

Rural incomes are often lower than those in Britain’s cities, putting expensive broadband systems out of reach for many farming households. The Commission on Rural Communities, the government’s official adviser on the rural economy, concludes that more than a quarter of those who live outside towns and cities either do not have broadband or can only get it at speeds much less than a pretty basic 2 mbps compared to about 5% of urban dwellers.

There are concerns rural firms will move away from the countryside to urban areas where they can get faster broadband systems.

BT is sensitive to criticism about poor broadband service in rural Britain and says it will pilot a new fixed-line broadband system to help boost high-speed access for residents and businesses in rural areas.

Initial trials of the company’s Broadband Enabling Technology (BET) in Inverness and Dingwall, Scotland, have proved successful, delivering one mbps services over distances of up to 12km. The system will now be rolled out in eight more locations across the UK and is being tipped as a possible solution to the lack of broadband services in many rural areas.