BT to slash broadband prices and boost UK availability

BT plans to make its ADSL broadband services available to 90 percent of U.K. homes by the third quarter and cut wholesale fees...

BT plans to make its ADSL broadband services available to 90 percent of U.K. homes by the third quarter and cut wholesale fees for the service, were cautiously welcomed last week.

The company is slashing wholesale prices by up to 52%, it said, and will extend availability to around 600 more exchanges.

That would take coverage to about 90% of UK homes up from 67% - of which 800,000 subscribe at present.

David Harrington, industry adviser with the Communications Management Association said that the price cuts and greater coverage were to be welcomed - with provisos - but that the UK was in danger of slipping behind on bandwidth.

"Price, roll-out and bandwidth are part of a trilogy - I would like to see all three moving forward together to make access affordable for as many people as possible. The news on price and rollout are good - although BT is basically laying ADSL in areas where it is threatened by cable providers.

"Bandwidth is a concern in the UK," he said. In Japan 12mbps is available on ADSL, which makes BT's offering more like "narrow-broadband," he added.

"There is no technical reason why BT could not offer 8mbps in the UK except that such high bandwidth always-on connections would knock the bottom out of their own ISDN and PSTN markets," Harrington claimed.

BT said new software has allowed changes to the way fibre is deployed between exchanges, making back-haul links -the link from the exchange back to BT's core network - more efficient and thereby cutting costs.

That will allow 600 exchanges, which currently have no "trigger" levels, to make broadband deployment economically viable to BT.

Jan Dawson, an analyst with Ovum, said, " BT is staking its future on broadband. It is trying to make the pie as big as possible so its slice is the biggest. It is hoping to drive uptake among business. It is good for 'broadband Britain' but it is also worth noting that this did not come out of any Government directive."

Commenting on the moves e-Commerce Minister Stephen Timms said: "We welcome the price cuts, as we welcome any moves to further the Government's goal of creating the most extensive and competitive market for broadband in the G7 by 2005. We are committed to promoting effective competition in wholesale broadband markets."

Wholesale charges to ISPs are being cut, from £14.75 per domestic line per month to £13.00, and by more than 50% for small businesses, BT said.


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