BT cuts broadband costs

BT has finally unveiled the new cost of wholesale consumer broadband in the UK.

Following much speculation, the company said this morning that it will cut prices to £14.75 from 1 April, a reduction which service providers should pass on to end users.

The price of BT Wholesale's main consumer product to service providers (BT IPStream 500) will drop from £30 a month, or £25 a month for the recently introduced self-install version (BT IPStream Home) to £14.75 for both. Rental for existing ADSL wholesale customers of these services will also drop to £14.75.

In a statement, CEO Ben Verwaayen said: "Broadband is the future for Britain and we're putting it at the heart of BT's plans for growth in the UK mass market. This will drive the whole market forward by making broadband affordable, attractive and accessible."

He also revealed BT's plans to attract one million asymmetric digital subscriber line (ADSL) broadband connections over its network by summer 2003.

Currently there are 145,000 users signed up by BT's 200 wholesale customers, up from 40,000 a year ago.

As well as the price cuts, BT aims to reach its targets by improving the experience of its wholesale customers and end users through better network performance and service quality, and by boosting marketing activity. It is also continuing its search for partnerships to extend broadband to less commercially viable areas.

Paul Reynolds, CEO of BT Wholesale, added: "We have now achieved the price that service providers told us they needed to get end user prices below £30. We have made sustained improvements in network service levels in recent months and are taking action on automation to help service providers to improve the customer experience even further.

"We expect these new low prices to drive up demand for broadband. Now the momentum for broadband take-up should build. Today's announcement is a first step, but a significant one."

We'll have more on the announcement later...