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Speculation over BT broadband price cut

BT told industry figures on Wednesday that its wholesale ADSL prices are under review, but the telco is dampening hopes of an imminent cut
Written by Graeme Wearden, Contributor

Comments made by a senior BT executive on Tuesday have sparked speculation that the telco could soon reduce the cost of its wholesale ADSL products.

Speaking at BT Wholesale's Broadband Customer Forum in London, Bruce Stanford -- director of wholesale products at BT -- told the assembled audience that the company is reviewing prices of its wholesale broadband products.

This remark has led some of those present at the event -- attended by representatives from government bodies as well as ISPs -- to believe that wholesale prices could soon fall.

Such a move would give a welcome boost to Britain's broadband market, especially as BT Wholesale's successful offer of a half-price activation fee is drawing to a close.

BT, though, has played down suggestions that it might be close to chopping its wholesale broadband prices, and insisted that Stanford was not flagging up anything more than normal business practice.

"Our prices are under review all the time. When that on-going process produces results that we can act on then we do so," explained a BT Wholesale spokesman, adding that the comments were also made in the context of the impending conclusion of the half-price activation fee offer.

But what of those who left Tuesday's event believing that further wholesale broadband price cuts were on the cards?

"We wouldn't rule anything out -- that would be a foolish thing to do. If they've come to that conclusion, then that's the conclusion they came to," the BT Wholesale spokesman said.

BT slashed its wholesale ADSL prices back in spring 2002 -- giving a major boost to the take-up of high-speed Internet services in the UK.

A repeat of this move would help BT to hit its target of one million ADSL customers by this summer, and also aid the government to achieve its aim of making the UK the most extensive and competitive broadband market in the G7 by 2005.

ZDNet UK understands that some ISPs are hoping that BT might decide to permanently cut the wholesale activation cost of ADSL. BT dropped it from £50 to £25 for the first three months of this year, a cut that most ISPs passed onto customers and some even took further by abolishing it completely.

BT Wholesale said on Wednesday, though, that the activation fee will return to £50 from 1 April, leaving ISPs with the choice of either raising their prices too or absorbing the cost and continuing to offer customers a discount.

BT also announced several forthcoming broadband initiatives at the Customer Forum, including a 1Mbps product, more trigger levels for rural exchanges and details about how it will extend the range of 512Kbps ADSL.

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