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BT hits new broadband heights

With broadband take-up better than ever, rivals are rolling up their sleeves to battle BT on speed

More consumers and businesses than ever before are signing up for a high-speed Internet connection down their phone lines.

BT announced on Thursday that in the three months to the end of September it had signed up more than 600,000 new wholesale broadband customers, more than any previous quarter. This took the telco's total wholesale ADSL user base to just under 3.3 million.

A key driver behind this increased adoption is that virtually anyone in the UK can get at least a 512Kbps ADSL connection. In August BT put an end to the line length limit that once meant potential customers couldn't sign up for broadband if they were more than 6km from their local exchange.

"This breakthrough led to a dramatic increase in orders as we were suddenly able to satisfy the pent-up demand that existed in many areas. It was also the case that many more communities had access to broadband in the quarter thanks to the continuing roll out of broadband by BT," said Paul Reynolds, BT Wholesale's chief executive, in a statement.

BT also announced that its retail share of the market had risen slightly from 29 percent to 30 percent. This followed its controversial offer of a free flight to all new customers, which left many claiming they had been let down by the operator.

As ADSL moves towards mass-market status, early adopters are turning their attention to faster services, and this is a market where BT may be under some threat.

Earlier this week it announced trials of a 2Mbps broadband services, which would be four times faster than the entry-level 500Kbps broadband products. Rivals have been quick to dismiss BT's offer as too little, too late.

"This is BT playing catch-up and not very well," said David Ferguson, marketing manager at Bulldog. "We launched a two meg service nearly two years ago."

However, Bulldog's fastest services have been restricted to urban areas, while BT's should be available from all its local telephone exchanges -- although a line limit will apply to this faster product.

NTL may soon pose more serious competition to BT on the speed side. From January 2005 it will launch 1Mbps, 2Mbps and 3Mbps broadband services for £17.99, £24.99 and £37.99 per month respectively.