Broadband cuts threaten price war
A PRICE war is expected to break out after an internet firm yesterday slashed the cost of its broadband home connection. UK Online became the first service provider to offer broadband for less than £10 a month.
The company is charging £9.99 per month - down from £19.99. Its rivals, which include BT and AOL, are expected to drop their prices in response.
'This is going to spark a huge price war because for the first time you can now get high-speed internet access for less than £10 a month,' said Dylan Armbrust, editor of Computer Active magazine. 'A year ago UK Online was offering dial-up access which is ten times slower for around £15 a month.'
Recent figures show there are more than five million UK users of broadband - which offers faster access to the internet than a traditional telephone line dial-up connection. Armbrust believes the £10 mark is low enough to prompt many more consumers to opt for broadband.
The price cuts have been made possible because the telecommunications adjudicator has ruled that BT had to open up its telephone exchanges and allow Internet Service Providers to install their own equipment instead of having to pay to use that of BT.
UK Online's general manager Chris Stenning said: 'We have cut our costs by cutting out the middle man.' The firm, which covers 4.5m homes in mainly metropolitan areas such as London and Glasgow, is offering three levels of broadband connection. They range from £9.99 a month for the 512k service, which is ten times faster than dial-up, to £29.99 for a service 160 times faster.
A BT spokesman said: 'It looks good on paper but it is only available to fewer than one in five of the UK population.'
