Openworld claims success after broadband price cut

The evidence suggests that dropping the installation cost of ADSL boosts take-up
Written by Graeme Wearden, Contributor

BT Wholesale's decision to drop the installation cost of ADSL and extend the range of the technology appears to have boosted the take-up of high-speed Internet access in the UK.

Internet service provider BTopenworld announced on Wednesday that it gained around 10,000 broadband customers in October, giving it over 62,000 broadband customers. It also gained over 10,000 new ADSL subscribers in September.

BTopenworld's broadband customer base has been growing steadily this year, and the company believes that halving the installation cost of ADSL to £75 helped to encourage people to upgrade their Internet connection.

"The increase has been boosted in recent weeks by the introduction of a half-price offer on the consumer and business 512k product," said a BT spokesman. The half-price ADSL installation offer will run until the end of 2001.

The installation price cut was also offered to other ISPs, and seems to have been generally well-received. BT Wholesale's Rebecca Webster said last month that broadband demand from the 195 ISPs to which it sells ADSL had "doubled in the last two weeks."

BT also recently launched Rate Adaptive DSL, which increases the maximum range of an ADSL-enabled exchange from 3.5km to 5.5km.

Between March and September, the number of broadband customers at BTopenworld more than doubled -- from 25,026 to 52,336. The total number of business customers increased from 9,672 to 21,344 -- while consumer user numbers grew from 15,354 to 30,992.

Since achieving its target of installing ADSL in over 1,000 exchanges, BT has begun an advertising campaign in an attempt to get more people signing up to broadband. The company denies that it has permanently stopped rolling out ADSL across the UK, and is in talks with other bodies -- such as Regional Development Authorities -- to see if funding can be found to install broadband in areas where the small number of potential customers makes it less financially viable.

BT is also planning to launch a service to offer high-speed Internet access via satellite. Figures released this week showed that as well as costing at least £69.99+VAT a month, customers must pay an installation fee of £899 -- or £1,299 if they want to link four computers to the broadband connection.

If customers are prepared to pay £75 to have ADSL installed, but not £150, it seems highly likely that a four-figure installation fee will deter many potential broadband customers.

Ben Andradi, president and chief operating officer of BTopenworld, is confident that the company is moving in the right direction. "Extended reach (Rate Adaptive DSL) has allowed us to provide broadband to even more people," said Adnrahi in a statement.

"Over the coming months we will see other new services which will help extend this even further. Our satellite service for businesses is now up and running and we will be taking part in the trials of self install broadband, while our Teleworker product allows us to reach the hundreds of thousands of homeworkers currently denied a cost effective digital link to their corporate intranet."

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