AOL may opt for mass-market broadband rollout

Following BT's steep price cuts on wholesale ADSL, AOL and other ISPs may be more willing to put their advertising weight behind the technology

The ADSL price cuts announced by BT on Tuesday morning have already been applauded by AOL UK, which has indicated that it may soon launch a mass-market broadband product in Britain.

ADSL is delivered via standard telephone lines, and is the technology that powers BT's broadband -- high-speed, always-on Internet access.

AOL UK has often been critical of BT's approach to broadband, and has repeatedly called on the company to cuts its prices. Tuesday's announcement, which should see the retail cost of broadband fall to £30 per month, has found favour with the ISP, which currently has more than 1.5 million customers in the UK.

"This is a very positive announcement which we welcome," said Karen Thomson, AOL UK's chief executive. "We are presently examining the details, but it is already clear that these price cuts take us much closer to a mass-market rollout of broadband," she added.

AOL UK already offers a broadband product based on BT Wholesale's ADSL, but hasn't promoted it because of concerns about price and availability.

There are currently only around 145,000 users of BT Wholesale's consumer ADSL product, which is available from around 200 ISPs. BT is aiming to reach one million users by the summer of next year. This target is much more likely to be achieved if AOL decides to launch a broadband package, as the ISP would spend considerable sums advertising any such product.

The details that AOL is looking into are thought to include service level agreements and future rollout plans. The company has said in the past that it would be difficult for it to advertise broadband on a large scale when the product is unavailable in large parts of Britain.

BT's price cut announcement included a pledge to "expand its existing broadband availability beyond the 1,010 largely urban exchanges already enabled, where clear demand indicates commercial viability, or in partnerships with others." This statement may reassure AOL, and other large ISPs, that broadband will soon reach more of the UK's rural areas.


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