Cool reaction to ADSL price cuts

Users and analysts gave a cautious welcome to BT's decision to cut wholesale ADSL access prices by almost half.

Users and analysts gave a cautious welcome to BT's decision to cut wholesale ADSL access prices by almost half.

The telecoms giant said last week that it would offer broadband access to service providers for £14.75 per month - the price had been between £25 and £30.

The cut should bring the end-user price down to about £30 per month, making it more accessible to small businesses and increasing the pool of consumers with high-speed Internet access.

The move forms part of chief executive Ben Verwaayen's plan to expand the broadband component of BT's customer base to one million by next summer and seven million within four years.

Gary Fisher, an analyst with Bloor, said, "Any price cut is good news but it will not prove significant enough to attract many smaller businesses to broadband by ADSL. Smaller firms need a reason to go out and get broadband, such as the availability of services like provision of software as a service."

While welcoming lower prices, industry observers also pointed out that ADSL connection is still only available to 60% of the UK - a fact which threatens to create a "digital divide" as those in remote areas are left without high speed access to the Internet.

Mike Smith, senior research analyst with Butler Group, said, "Anything making broadband cheaper is a good thing, but many smaller businesses will still not be able to take advantage if they are located in rural areas. In urban areas business already has a choice of methods of gaining high speed access but those in areas not served by ADSL will still struggle to deliver marketing information and host Web sites."

A Communications Management Association spokesman said, "It is welcome news from the business user perspective. It should have been done earlier but at least it has happened. That said, if you live in the wrong place you're still stuffed."

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