Sky Digital customers who sign up for BT's "no-frills" broadband package will get their Alcatel "Green Frog" DSL modem for free, under an agreement announced on Thursday.
The special offer, which is available to subscribers to Sky digital's Sky World package, means a saving of £80. BT believes that the offer will help it reach its target of 500,000 "no-frills" subscribers by next summer.
"This deal is a key driver in helping us achieve a higher volume of broadband connections and builds on our existing relationship with BSkyB," said Angus Porter, managing director of BT Retail's consumer division in a statement.
"We are very confident that this will be a competitive proposition and I expect the offer to Sky customers to account for around 20 per cent of BT Broadband sales," Porter added.
BT and Sky announced back in July that they were teaming up to offer BT Broadband -- the "no-frills" product -- on special terms to Sky's user base.
BT Broadband was launched earlier this year, and is offered by BT Retail rather than the telco's Internet arm, BTopenworld. Unlike traditional broadband services it does not include features such as email or Web hosting.
It costs £28 per month, or £27 by direct debit. Some ISPs offer more feature-rich broadband services for less than this, leading to accusations that BT Broadband is poor value for money. BT Retail, though, has insisted that it isn't economically viable to offer broadband for any less than the cost of BT Broadband.
In an interview with ZDNet UK in June, Porter said that BT Retail is aiming to capture half of the UK's consumer broadband market with BT Broadband. He also claimed that ISPs who "only provide connectivity and have nothing else to offer" were under threat from the product.
BT Broadband also allows users to provide their own modem, reflecting the fact that DSL modem prices have fallen considerably over the last year. Customers must also pay a £60 charge to cover installation work at the local exchange, but BT Retail is cutting this cost to £30 until the end of 2002.
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