BT exchanges now connect more than 5 million people to broadband services in the UK, beating the target the company set itself by a year.
The news makes broadband one of the fastest adopted technologies in history, growing faster than mobile phones, television or video recorders.
"Three years ago when we set a target of five million [connections] by 2006 it seemed a daunting task," said Ben Verwaayen, BT's chief executive.
"To have reached this milestone so early into 2005 is a massive achievement for the whole industry. But now the focus needs to move from broadband availability towards the ways in which broadband can improve people's lives."
BT now has more than 95 per cent of the population within reach of broadband and is set to make that 99 per cent by the summer. This was one of the key targets set by the government plan launched on Friday.
"It is great news for the whole communications industry that BT has been able to make this announcement a year ahead of target," said Prime Minister Tony Blair.
"Broadband has the ability to transform the way we live our lives - whether in business, education or in how we use our leisure time. Most significantly of all, the adoption of broadband technology will enhance the UK's ability to compete in the modern knowledge economy."
The company also set itself new targets for 2007, if it can get government support. It wants to get broadband into every school in the country and get 18 million people in the UK shopping online.
BT has about 35 per cent of the UK broadband market, with over 200 other companies competing for customers. However BT was recently criticised by the Office of the Telecoms Adjudicator (OTA) for being slow in opening up its exchanges.