BT latest to announce broadband price cuts

Activation fees get the boot and modem prices are cut as the new year sees the glimmers of a broadband price war

Joining a long line of fellow Internet service providers, BT announced on Monday that it is cutting the cost of getting a broadband connection.

Customers who sign up for either BT Broadband -- the no-frills product offered by BT Retail -- or broadband from BT Openworld before 31 March this year will have their account activated for free, a saving of £65. In addition, they will be able to buy an ADSL modem for £50, compared to earlier prices of £80 and £85.

BT Openworld is also axing the connection fee for business products for three months -- a saving of up to £260.

This follows BT Wholesale's decision last year to halve broadband activation costs from £60 to £30 for the first three months of 2003. Many ISPs have already said they will pass this reduction onto consumers, but BT is going further than most by completely dropping the charge -- a move also taken by Demon.

BT is also going further than its rivals by deciding to permanently drop the £60 broadband activation cost for BT Openworld customers, rather than just for three months, in an attempt to increase its market share.

"By waiving the connection fee, Openworld feels that it will attract more customers and thus more than cover the cost of this move," a BT spokesman told ZDNet UK News.

It is understood that this decision has been under consideration for some time, including before BT Openworld was moved into BT Retail in an internal reorganisation in December last year -- which is perhaps why BT Broadband customers will still be charged a connection fee after 31 March.

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