No price cut planned for BT Broadband

BT Broadband, the "no-frills" high-speed Internet access package sold by BT Retail, will not be dropping in price in response to last week's ADSL price cuts.

According to BT Retail there are no immediate plans to reduce its monthly cost -- currently £28 per month (or £27 by direct debit), despite speculation within the industry that a cut will soon be introduced to boost take-up of the flagship BT product.

Instead, BT Retail is sticking with its plan to tempt customers aboard by keeping start-up costs low; a policy also followed by several ISPs, including AOL and Nildram.

"We are not cutting the price of BT Broadband at the moment because that we feel it is good value, and in addition we have just extended our offer of free connection until June 30th, a saving of £60," a BT Retail spokesman told ZDNet UK this week, adding that customers can also save £40 on the cost of a modem by ordering online.

Last week, BT cut the cost of wholesale consumer ADSL from £14.75 per month to £13. Some ISPs have claimed that this will not actually allow them to cut their prices as BT has also just ended a special offer that reduced the activation fee from £60 to £30 -- cancelling out the saving from the lower monthly rental.

They also suggested this wholesale cut was in fact a plan for BT Broadband to chop its monthly fee by a few pounds a month. This would make it more competitive against those ISPs whose broadband services include extra features such as email and Web space.

The word from BT Retail, though, is that this simply isn't the case.

The company spokesman added that BT Retail is still aiming to reach 500,000 customers by the time BT Wholesale -- whose ADSL is resold by over 100 other ISPs as well as BT Retail -- reached one million users, which is expected to happen this summer.

AOL, which also charges £28 per month for broadband, axed both the activation fee and the modem cost several months ago. Nildram announced last week that it is replacing the half-price activation fee with a free month of broadband for new users, for orders received before the end of this month.

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