BT cuts price to boost broadband
CHEAPER and faster internet access was promised today by British Telecom as it slashed its prices and launched a massive advertising campaign to boost the take-up of broadband services.
New chief executive Ben Verwaayen vowed to 'kick-start' Broadband Britain when he took up his post at the start of this month. Today he said: 'Broadband is the future for Britain and we're putting it at the heart of BT's plans for growth in the UK mass market. This will drive the whole market forward by making broadband affordable, attractive and accessible.'
BT said it would cut the amount it charges other internet service providers such as AOL and Freeserve from £25 a month to £14.75 which, it said, would in turn allow them to charge consumers less than £30 a month - at least £10 less than current rates.
Broadband uses the copper cable that connects most homes and businesses to BT's main fibre-optic network but allows it to carry data at more than 10 times present speeds. This not only allows always-on internet access but also brings the potential for such services as video on demand and teleworking.
Today's price cut could prove damaging to NTL and Telewest, Britain's two dominant but heavily debt-laden cable companies, who have been slow in their roll-out of always-on internet access.
Until now fewer than 150,000 UK subscribers have taken up the high-speed asymmetric digital subscriber line (ADSL) service, compared with about 2.1m in Germany. Prime Minister Tony Blair has said he wants to see the creation of Broadband Britain by 2005.
Verwaayen set an ambitious target of one million ADSL subscribers by the summer of 2003. He said: 'This is a stretching programme but achievable. Through substantial reductions in the cost of providing service we can set prices that will stimulate the market strongly, and make money out of it. This is a sustainable business model.'
BT is not only launching its own advertising campaign to publicise its lower wholesale prices but will also support marketing initiatives such as direct mail shots and call centre support for more than 40 service providers who are customers of BT Wholesale.
Broadband is presently available to customers served by just over 1,000 mainly urban exchanges. BT said it would seek partnerships such as the one it has with the South West of England Regional Development Agency to push the service into rural communities.
