BT business broadband: Just how scant is take-up?

BT's decision to suspend the rollout of symmetrical DSL (SDSL) services across its network was thrown into new light after the telco revealed just how disappointing take-up has been so far.

A BT spokeswoman admitted on Monday that "a very high percentage of the 729 local exchanges that offer SDSL have no SDSL customers at all". The telco is still refusing to say how many SDSL connections have been sold.

BT suspended SDSL rollout last week, blaming poor take-up caused by high prices. SDSL is aimed at small businesses, such as design agencies, and branch offices which need a fast uplink to the internet. Unlike ADSL, SDSL offers high speeds for both uploading and downloading.

Some internet service providers have already expressed disappointment at BT's decision to stop at 729 SDSL-enabled telephone exchanges, rather than hitting its target of 800.

Luke Lang, marketing manager at ISP Eclipse Internet, who claimed that SDSL demand had picked up in recent months, said: "It is a little bit of a setback that BT has backtracked on its SDSL rollout."

SDSL currently costs anywhere between £120 and £400 per month, which Lang pointed out could seem "way over the top" for some small firms.

BT is set to cut its wholesale SDSL prices by 30 per cent in November. It plans to then wait until January 2006 to see what the impact is - a plan which didn't impress Lang.

"By suspending rollout now, it doesn't appear that BT has much confidence in the success of the price cuts," Lang suggested.

BT, though, insists the rollout suspension is a sensible move. The BT spokeswoman said: "Effectively, there's not enough demand at the existing exchanges for the suspension to be detrimental to service providers."

Plusnet, another ISP which resells BT's SDSL products, agrees high prices are a key factor behind SDSL failure. Ian McKenzie, PlusNet's Product Manager, isn't convinced BT's 30 per cent price cuts will make the difference.

"The current freeze on the 729 SDSL enabled exchanges will enable the majority of businesses in the UK to be served by SDSL. However the premium cost associated with these services means businesses have traditionally looked for more cost effective alternatives, even with the recent announcement by BT to reduce the wholesale costs to service providers," said McKenzie.

Research group Point Topic warned back in May 2004 that many businesses were unconvinced by SDSL merits. Speaking on Monday, a Point Topic analyst said SDSL take-up still hadn't taken off, and suggested ISPs were waiting for faster broadband technologies like ADSL2+.

McKenzie agrees that superior products are on the horizon. "At this moment in time the market continues to evolve faster connectivity with Max DSL, ADSL 2+, LLU and WiMax, which all lend themselves to increasing download and upload speeds at far more attractive pricing for both residential and business customers," he said.

ADSL2+ could provide download speeds of up to 24Mbps, while Max DSL offers a faster upload speed than is possible with ADSL.

BT is currently testing ADSL2+ and Max DSL, and commercial launch dates are not yet available.

One rival telco, though, insists that SDSL is a viable technology if deployed correctly. Justin Fielder, business development director of Easynet, said: "Easynet hasn't noticed any pricing issues with take-up in the exchanges in which it offers its LLU SDSL product, as customers value the combination of symmetric speed coupled with a service level guarantee. This means that the business can rely on the connection for critical business functions."

Graeme Wearden writes for ZDNet UK