Lower broadband prices ahead, says govt

UK consumers and businesses could soon be paying less for a high-speed internet connection, according to e-minister Patricia Hewitt.

Speaking on Monday, Hewitt - who is also secretary of state for trade and industry - hailed the progress made in Britain's broadband market over recent years.

"Prices have come down, and I think they'll increasingly come down," said Hewitt at an event to launch the latest UK Online annual report.

e-Envoy Andrew Pinder indicated he was also pleased at how far the UK has moved on from the days when broadband availability was generally limited to those in metropolitan areas, and those who wanted ADSL had to pay around £50 per month.

The cost of ADSL has effectively halved since the start of 2002, when BT CEO Ben Verwaayen announced a massive cut in the cost of the telco's wholesale consumer broadband products, which are resold by over 100 ISPs.

A second price cut, in May this year, pushed down business broadband prices.

There is still plenty of variation in broadband pricing, depending on which ISP a customer chooses. The obvious way for ADSL prices to fall further would be if wholesale prices were cut again by BT - a move that could even jolt the cable companies into lowering their own costs. BT would not speculate on Monday about future price cuts.

Hewitt cited the fact that the UK now has over three million broadband users as proof that the government was right not to subsidise broadband rollout, or to allow an incumbent operator to dominate the retail market.

"We stuck to our guns, and now it's clear that we were right to do so. Prices have come down, and take-up is up," Hewitt said.

Graeme Wearden writes for ZDNet UK