UK consumers pay more for broadband

Prices still too high for most consumers, Oftel says

Figures released by telecoms watchdog Oftel reveal that UK consumers are paying more for broadband services than their European and US counterparts.

The survey shows the monthly charge for broadband services is around £40, compared to £37 in France, £31 in Germany and £32 in the US. Experts predict that prices will have to fall to around £25 per month to encourage mass takeup of broadband services. Ntl recently dropped the price of its cable modem service to £19.99 per month.

Director general of Oftel David Edmonds admits that UK prices are "somewhat less favourable compared to the other countries' surveys", but claims it is because broadband in the UK is still at an "early stage". "Prices should fall farther as competition and choice for broadband services continues to grow. Local loop unbundling will provide further competition," he says.

A survey conducted by ECTA (European Competitive Telecommunications Association) Friday showed that the UK was well behind many of its European neighbours in terms of unbundling the local loop. ECTA is concerned that BT is about to carry its monopoly of voice services over into the broadband arena.

Oftel claims local loop unbundling will increase competition but can offer no ballpark figure about how much consumers should pay or how many operators offering unbundled services would constitute a healthy market. "It would be nice but we aren't into predicting the future," says an Oftel spokeswoman. "We are opening the doors and what happens after that is up to the operators," she says.

BT questions Oftel's figures, claiming they are not comparing like for like. "Some of these figures are for less bandwidth and in some cases people have to pay more for installing the equipment," says a BT spokesman.

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