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Users welcomed the move as evidence that BT has finally seen the benefit of giving business the broadband service it needs.
BT chief executive Ben Verwaayen said the company plans to cut wholesale line rental for ADSL connections from £25 to £14.75 a month from April. He said BT would encourage all service providers to use the wholesale saving to set new prices for consumers and businesses.
David Harrington, chairman of the Communications Managers Association, welcomed the price cuts but criticised BT for dragging its feet.
"At long last BT has grasped the opportunity that has been staring it in the face for three years," he said.
"It is tremendous news for business users as there is now a real alternative to leased-line technology."
E-commerce minister Douglas Alexander also welcomed the move. "Provided BT's wholesale prices remain fair, today's announcement is excellent news for consumers and businesses," he said.