The city of York is to have the fastest broadband speeds in Britain after four telecoms groups, led by Sky and TalkTalk, announced plans to build an ultrafast network.

Capable of delivering speeds of up to 1 gigabit per second (1Gbps), the infrastructure project is the biggest challenge yet to BT's dominance of the UK's fixed-line telecoms infrastructure.

York's network will be built by the Japanese electronics firm Fujitsu and CityFibre, a British firm which already owns 29,000km of fibre and sells high speeds to public sector, mobile network and business clients.

The companies say they intend to bring ultra-fast broadband to two further cities – as yet un-named – across the UK.

York's network will beat BT and Virgin Media's top speeds by running fibre optic cables all the way to buildings, serving tens of thousands of homes and businesses in the city.

While the UK has pockets of fibre to premises – in areas such as Yorkshire and Hull, for example – this will be the first engineering project to install ultra-fast on a city-wide basis. The first phase will connect 20,000 premises – around 10% of York's population.

BT's infrastructure mostly takes fibre as far as the street cabinet, relying on copper for the final mile to the doorstep, giving a top speed of up to 80 megabits per second (80Mbps). The company does offer fibre all the way to the premises at 330Mbps to consumers who request it - the product costs £38 a month plus installation but is not available from all exchanges.

Targeting a city of 200,000 inhabitants, this will be one of the most ambitious infrastructure projects undertaken by Sky and TalkTalk, which until now have relied entirely on BT's own network to reach their customers.

The project will give them the chance to test what they claim is a cost-effective approach to building a pure fibre network independently of BT. Details such as launch dates and pricing are still to be confirmed.

Sky, TalkTalk and CityFibre will each hold a 33.3% equity stake in the joint venture. Sky and TalkTalk will each invest £5m, with CityFibre making its contribution in kind through the use of fibre it has already installed in York. This currently links public sector buildings in the city.

"TalkTalk has a long history and proven track record of disrupting new markets, and this is the next step in that journey," said the company's chief executive Dido Harding. "We are excited to be working in partnership with Sky and CityFibre to build this new network that will offer significantly higher speeds at much better value than is currently available. This marks TalkTalk taking its first steps into investing in building infrastructure as part of our mission to make British homes and businesses better off."

She said the project marked a major change of direction for her company: "We're excited about this being the first step in our journey to becoming an infrastructure company."

York city council leader James Alexander said: "This announcement makes York the digital infrastructure capital of the UK. Gaining ultra-fast broadband across the city is a huge boost for our economy, providing significant new opportunities for businesses based here and better quality and value to our residents."

The next two cities are likely to be selected through a competition, with areas that show the most interest from potential customers chosen to be next on the list.

The partners have taken inspiration from Google, which installed gigabit fibre in Kansas and is now looking at a further nine metropolitan areas in the United States. The speed is enough for 200 people in one house to stream HD video.

Joe Garner, head of BT's Openreach division, which runs its network, said: "Openreach already offers Fibre To The Premises in parts of York. This means that customers and businesses in the city will have even more choice which can only be a good thing. We will continue to respond to our customers evolving needs."

The home of the future?



From Kansas in the US to Seoul in South Korea – and now York – cities around the world are being wired up to ultrafast fibre optic broadband. One Gigabit internet, which Sky and TalkTalk are planning to offer in York, gives download speeds equal to 1024 Megabits per second, or 57 times what is available to a typical household – the average UK broadband service now downloads at 18Mbps, according to Ofcom.

Such a connection is guaranteed to put an end to buffering, but how useful will it be in daily life, and what new technologies will it enable?

Experience in Hull, where the local telecoms company Kcom has invested in thousands of fibre connections direct to buildings, suggests that the first thing people do once their property has a fibre cable running all the way to the exchange is upload lots of content.

Fibre can upload much faster than the typical copper broadband service, so collections of music and videos, home movies and photo albums can all be painlessly stored and backed up on Cloud servers many hundreds of miles away. Transmitting 100 photos or 100 songs takes three seconds at the speed planned for York, and just 7 seconds are needed for a high-definition film. The same activities on an 18Mbps broadband connection via the phone line would take five to 10 minutes.

With this kind of bandwidth, dozens of devices per household will be connected to the web, from smartphones, tablets and televisions to smoke detectors, baby monitors, security systems, boilers and even fridges or cookers.

Schoolchildren will be able to pick up and spin three-dimensional models of the solar system stored on a publisher's servers, using giant screens that sense eye and hand movements. And with no delay between sound and image, virtual orchestras could be assembled from players in separate studios.

Using the kind of immersive-technology headsets that are being developed by Oculus, the gaming company recently bought by Facebook, players will be able to walk, jump and turn through three-dimensional landscapes. Gigabit fibre will be disruptive to media, education, industry, and potentially to the living-room furniture.