Google aimed to build ultrafast broadband in Britain

Google is exploring building ultrafast fibre optic networks in British cities, in a move that would add to pressure on BT to further upgrade its ageing infrastructure.

It is understood that web giant has held detailed talks with a recently listed British company called CityFibre, with a view to extending its Google Fiber project outside the US for the first time.

The discussions broke down amid concerns from CityFibre that an existing partnership with BSkyB would be threatened. BSkyB and TalkTalk are funding a pilot fibre-optic network rollout in to 20,000 homes and businesses in York.

CityFibre feared the satellite broadcaster would see the web giant as a future rival in the pay-TV market and back out, sources said. Google is understood to still be looking to build internet infrastructure in the UK, however.

A source said: “Google historically have always publicly said they would never build fibre outside the US. But in the background they are talking to people here in the UK and looking at projects.

"It makes sense; Britain is their biggest market outside the US."

Google Fibre currently operates fibre optic networks in US four cities and this year announced plans to extend the project to a further 34 cities, in what was seen as an endorsement of the economics of the projects. In contrast to BT’s network, which relies on old copper wires for the final hop from the street into homes, Google’s networks use fibre optics for the entire connection.

The infrastructure provides internet access at 1,000 megabits per second, compared to a current maximum of 76 megabits per second on most of BT’s network. The extra speed and reliability allows Google to provide high definition television over its networks and it is planning for 4K, video technology that is four times as sharp again.

BSkyB and TalkTalk are planning similar speeds and products via their new network in York. The pair have agreed to explore building in two more second-tier cities where CityFibre already has a central fibre optic infrastructure that can be extended into homes and businesses, such as Coventry and Peterborough.

Google sources confirmed the company held talks with CityFibre but said they did not progress to a contract. A British Google Fiber project is not expected to be announced soon, they said.

CityFibre declined to comment.

Google also revealed a 22pc jump in second-quarter revenues to $16bn, as more people used the search engine on their mobiles and tablet devices. This surge in mobile usage has been a problem for Google in the past, because the company earns less money for “clicks” on adverts that are viewed on mobile devices than it does for those viewed on PCs. However, a 25pc increase in the actual number of clicks offset a 6pc decline in pricing, helping to push Google’s quarterly profits up 6pc to $3.42bn.

Separately, Google said its chief business officer, Nikesh Arora, is leaving the business after nearly a decade in order to join Japan’s SoftBank.