BT set to cut broadband prices

Talk of a 50 percent cut in the cost of ADSL may just be speculation, but a series of key price cuts are predicted for the coming months
Written by Graeme Wearden, Contributor

BT's new chief executive Ben Verwaayen is planning a series of significant ADSL price cuts in the next few months, in an attempt to boost the take-up of broadband service in the UK.

According to some reports, the cost of BT's wholesale ADSL product could have halved by this summer -- a move that could encourage millions of British Web users to upgrade to broadband.

Verwaayen, who replaced Sir Peter Bonfield earlier this month, will use BT's third-quarter financial results, to be reported on Thursday, to signal a renewed focus on broadband. "Ben Verwaayen will use his speech to stress that broadband is a top priority for BT," a BT spokesman told ZDNet UK News on Monday.

The Sunday Telegraph has claimed that Verwaayen will halve the cost of broadband access. The BT spokesman insisted that this was "speculation", but suggested that a series of announcements over the coming months will see the price of ADSL come down.

"Pricing is a critical factor, especially when customers can get unmetered narrowband access for £15 per month," the BT spokesman said.

The wholesale ADSL package that ISPs buy from BT costs £30 per month. It is then sold on to customers -- typically costing at least £40 per month. Customers, ISPs and even e-commerce minister Douglas Alexander have all urged BT to drop its wholesale prices.

BT's defence has been that telecom regulations prevent it from selling products at a loss -- but the company now seems prepared to cut prices, and then let the regulator decide. This move could soon put Oftel in the unenviable position of having to block BT's price cuts.

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