BT satellite broadband due this month

Rural businesses will be able to get high-speed satellite Internet access by the end of November, but installation costs will be high
Written by Graeme Wearden, Contributor

Small and medium-sized businesses based in the more remote parts of Scotland and Northern Ireland will be able to get high-speed Internet access via satellite by the end of November, but they will have to pay considerably more than ADSL customers.

BTopenworld said today (Monday) that its broadband satellite service is due to go live at the end of November. The product is the result of a partnership with US satellite network firm Gilat. BT believes it is a way of taking broadband to areas that are too remote for ADSL to be an economically viable option. BT will initially only be installing the equipment necessary to receive the service in Scotland and Northern Ireland.

Director of growing businesses at BTopenworld, Douglas MacDiarmid, believes that the project should overcome some of the obstacles faced by those living in these rural areas. "Being involved in this phase should also underline the fact that businesses in the highlands and islands are as ready as any others to embrace new electronic working practices and turn them to their competitive advantage," MacDiarmid said in a statement.

When the first details of the service came to light back in July, BT was keen to emphasise that it would be aimed at small and medium-sized businesses. Now the pricing has been announced, and the figures suggest that it will be out of the reach of most home users.

In particular, the installation costs may deter any business that can't justify the investment.

Two packages will be available -- both of which offer download speeds of up to 500kbits/s and upload speeds of 150kbits/s, plus extras such as 20MB of Web space together with software such as Microsoft Outlook. The cheapest option, which restricts the broadband service to a single PC, costs £69.99+VAT per month. Alternatively, for £139.99+VAT per month, users can connect four computers to the service.

This compared to a charge of £39.99+VAT per month for BT's "business 500" ADSL package, or £99.99+VAT per month for the higher specification "business 500PLUS" offering.

But the significant extra cost with satellite broadband is in the installation. The single-user package comes with an installation charge of £899+VAT, while the installation charge for the four-user option is £1,299+VAT. In comparison, installation charges for BT's business ADSL packages start at £75+VAT.

A high-speed Internet connection can have significant benefits for even a small business, but with the higher cost of ADSL verses narrowband Internet -- one reason given by BT for the slow take-up of broadband -- it is possible that some firms may decide that this satellite service does not offer value.

Help may be available to small businesses to help them to offset this cost, however.

The Highlands and Islands Enterprise -- the development agency for the northern half of Scotland -- has agreed to invest up to £250,000 to help businesses to meet these installation costs. BT is currently in negotiation with Northern Ireland's Industrial Research and Technology Unit, in the hope of arranging similar support for small businesses.

There is an acceptance within government that investment will be needed if broadband is to be available in rural areas, where it simply isn't economic for a private company such as BT to carry out the expensive network upgrades. For this reason, the department of trade and industry has committed £30m to projects that could boost broadband take-up in more rural parts of the UK.

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