BT launches its 24Mbit broadband service over its 21st century network (21CN) next week, but small businesses will have to wait before they see a reduction in cost for high-speed connections.
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From this week, ISPs that use BT Wholesale connections could offer customers download speeds of up to 24Mbits per second over the previous 8Mbits per second headline speed, and upload speeds of up to 1.4Mbits per second from 256Kbits per second, using Asymmetric Digital Subscriber Line 2+ (ADSL2+) technology.
BT says it is initially targeting the service at densely populated areas such as London and Manchester and is committed to rolling out Wholesale Broadband Connect to every exchange in the UK by 2011.
But Ian Fogg, research director at Jupiter Research, said ISPs might only be willing to offer BT's faster ADSL2+ service to customers if the prices BT charges is lower or equal to the ones it charges for current broadband connections.
"Businesses are demanding higher broadband speeds but price is still an issue," said Fogg.
"How the wholesale prices of the ADSL2+ service compares against old ones will determine how fast ISPs make it available, and, in turn how affordable it will be for small businesses."
Fogg said that many small businesses still rely on consumer broadband or standard ADSL products, but that having higher download and upload speeds could open applications like virtual private networking - securely connecting to a company network through the internet - and larger e-mail attachments to them, which were previously the preserve of larger enterprises.
Although ADSL2+ tehnology is faster, speeds are still affected by the number of users online and the distance from the exchange.
The reality is that only a proportion of businesses will get the higher speeds they are promised under ADLS2+. This limits the number of customers an ISP could reach with faster broadband and could dissuade it from offering the service, said Rupert Wood, principal analyst at research firm Analysys Mason.
He said that in the past, when BT has offered a new wholesale product, different ISPs have taken up packages at different times and this could be the case with BT's ADSL2+ service.
"ISPs could take six months to a year to take on new products, and so there could be a delay between the availability of fast broadband from BT Wholesale and the avilability to small businesses."
Wood said previous BT deployments of Symmetric Digital Subscriber Line (SDSL) services - broadband with equal upload and download speeds - have had modest uptake for much the same reasons.
But David Harrington, head of regulatory affairs for the Communications Management Assocation, which represents network managers in IT, said that what UK business really need are fibre optic connections and that ADSL2+ technology will be insufficent for the future needs of UK firms.
Last year, former competitiveness minister Stephen Timms and the Broadband Stakeholders Group warned that failure to start a fibre roll-out within the next two years could see the UK falling behind other countries' broadband access.