BT has begun offering broadband access to its managed IP virtual private network services, allowing companies to speedily connect their smaller branch offices and remote workers at significantly lower prices than those charged for leased lines.
BT has seen strong demand for IP VPNs in recent months, although it has not always made financial sense for companies to hook remote offices and employees directly to their networks because of the high prices associated with leased lines.
However, BT is offering ADSL access to its managed IP VPNs so that companies can create a unified network across their locations for about half the cost of leased line access.
Tim Johnson, principal analyst at Ovum, said it represented an important move by BT, showing that it is willing to cannibalise its own highly-profitable leased line services to offer companies a cheaper option.
"This offering shows that BT is a bit more awake than its low-cost competitors believed and that it is willing to sacrifice its revenues to go after this niche of the market," he said.
Johnson believed that ADSL access to IP VPNs would be a big draw for firms that are looking to save costs on leased lines or which have not yet connected remote workers and offices.
The ADSL option is offered with BT's equIP managed Wan service and metroVPN regional service for county and city-based organisations.
The service will be available through BT exchanges which have been DSL-enabled and will offer downstream speeds of 256kbps, 512kbps,1Mbps and 2Mbps.
BT has been speeding up the upgrades of its exchanges to offer high-speed service. It already has one million wholesale broadband users, and hoped to add an additional four million by 2006.
Scarlet Pruitt writes for IDG News Service