More ISPs react to broadband price cuts

The significant cost reductions that BT announced last week will be passed on to customers, and are tempting more companies to offer broadband services
Written by Graeme Wearden, Contributor

Internet service provider One.Tel has joined the rush to announce new broadband pricing and is planning to undercut the UK's largest ISPs, following last week's cuts in the cost of BT's wholesale ADSL services.

The firm said on Monday that it will charge £27.99 per month for its consumer ADSL product. This is some £5 per month more expensive than getting broadband from Pipex or Freedom2Surf, but One.Tel is hoping that new customers will choose it rather than paying £29.99 per month to a big name ISP like Freeserve or BTopenworld.

Existing one.tel broadband customers will get with new, cheaper, price immediately, while new customers can sign up now. The first 1,000 people to register their interest will only charged a total £99.99 for their modem and the activation fee -- a saving of £60.

One.Tel only recently entered the broadband arena. It is owned by utility giant Centrica, which snapped up the broadband operations of Iomart back in January. At the time, it was suggested that Centrica was planning to use its marketing muscle to drive an aggressive policy towards broadband.

BT has also made significant cuts to the cost of its business ADSL products. Star Internet, a business ISP that had until now avoided ADSL, has now decided to offer the product to customers.

Star Internet claims that ADSL has until now failed to realise its potential, but believes that last week's price cuts make it possible to offer a decent service. "Star is now satisfied that recent improvements in infrastructure and price mean that it is ready to deliver on business needs," said marketing director Jos White in a statement. "Now the price is right, we can and will offer it to our customers."

"It is certainly true to say that ADSL does not have the resiliency of a leased line or ISDN but for some businesses this is not essential. It is able to provide fast download times, has a fixed charge and for many businesses will prove extremely cost effective," White added.

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