BT has denied that is ditching its consumer ADSL service, but at the same time admits that its focus will now be on the more lucrative business market.
The slowdown in e-commerce and advertising revenues has forced the telco's Internet arm BTopenworld to rethink its broadband strategy in favour of business customers. Several reports in recent weeks have predicted a slowdown in the demand for broadband and BT's shift to business will be seen as another nail in the consumer broadband coffin, which is already suffering from lack of alternative operators and the failure of local loop unbundling.
"At the moment our focus and effort is the SME [small and medium-sized enterprise] market but in the longer term we believe there will be growth in the demand for a consumer service," said a BTopenworld spokesman. "But we are not turning our backs on consumers by any stretch of the imagination."
BTopenworld has come in for a great deal of criticism since its launch last summer, for delays and glitches in installing ADSL in homes. So far it has connected just 26,000 home users despite initial demand from 100,000. The whole consumer ADSL market is currently in crisis. The process designed to open up BT's network to other broadband players has been brought to its knees, and operators complain that the wholesale service is failing to deliver and that BT's network division is unfairly favouring BTopenworld.
Freeserve's chief executive John Pluthero has described BT's broadband strategy as "a national disgrace" and arch-rivals AOL agree. "BT has sabotaged every aspect of the government's broadband plans. It is scandalous and the icing on the cake is that it can't sustain its consumer service," said an AOL spokesman.
He claims there is mounting industry clamour for the government to intervene to ensure that the split of BT's network and other divisions, due to happen in the autumn, is a radical one.
"It is time to break BT apart in a way that makes sense for consumers not for shareholders," he said. BT is currently planning to maintain the management of all of its different sectors under the same parent company, leading AOL to liken the telco to the beleaguered RailTrack.
BT's broadband record is not very impressive. Since October of last year BT's network division, BT Ignite, has connected just 45,000 ADSL customers across the UK. In Germany T-Online has 2.6 million households wired for broadband. "ADSL is just not happening in this country. At the present rate it will take us 30 years to connect all our customers," said the AOL spokesman.
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