BT halves business broadband start-up cost

Will taking an axe to SDSL connection fees encourage more customers to take up the service?

BT announced on Thursday that it is temporarily halving the cost of setting up a high-speed two-way Internet connection.

Between 21 October, 2004, and 24 February the wholesale connection charge for BT's SDSL products will drop from £450 to £225. The price cut must be held until the autumn because BT has to give Ofcom 90 days' notice of such price cuts.

"This special offer is designed to stimulate the take up of SDSL services, which are still relatively new products, and to encourage more of our service provider customers to add SDSL products to their broadband portfolio," said Wally Freeman, BT Wholesale general manager for broadband products.

The move mirrors similar cuts that BT made to the start-up cost of its consumer broadband range, which have helped to boost take-up rates. For this success to be replicated in the SDSL market, ISPs will need to pass BT's saving onto end users.

SDSL, which is more useful to businesses than ADSL, is currently only available from 150 of BT's local exchanges. A further 150 will be upgraded in the coming months.

The cost of SDSL has fallen significantly worldwide in the last year, but analysts have warned that many UK businesses are still reluctant to buy a connection.

Research firm Point Topic said back in May that SDSL was still a hard sell, with firms unconvinced of the benefits of applications such as voice over IP, IP-VPNs and video conferencing, which all benefit from symmetrical broadband links.