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By Heather McLean, 24 April 2002 17:10

NEWS BT Retail's 'no frills' ADSL offering will drive some ISPs out of business, according to market analysts and industry experts - although some believe the pricing point will not prove that attractive to users who are accustomed to getting email and web space along with their net access. The BT Broadband product removes the need for users to subscribe to an ISP as BT Retail intends to channel users through its network and straight into a world of content provided by partners. However, digital media analyst at Ovum, Dario Betti said: "BT Retail is playing with the definition of 'ISP'. It is the ISP here but it's separating access from content because it wants to change the way it charges customers. By doing so it will side-step a regulator that always tells them what to do and how to price things." Chris Panayis, MD of ISP Freedom2surf agreed with Betti: "BT is just playing with words. It is the ISP." Betti added: "While this offering isn't that bad for users in the short term, long term it will reduce competition in the ISP world. The £27 per month is only a few pounds less than ISPs like Freeserve charge, but that few pounds means a lot." Telecoms entrepreneur Bob Jones added: "This product will create distrust between ISPs and BT, because one division of the group is selling net access to another." However, David Rivington, director of strategy at local loop unbundler, Bulldog Communications, disagreed that the 'no frills' product will damage the ISP market. He said: "BT Openworld charges £29.99 for its ISP product which includes email. BT Retail will charge £27 for a product with no mail and a micropayment system that it intends to use to squeeze more cash out of users." Rivington summed up the problem with BT Retail's product: "If I can go down to Easyeverything and access my free email and get onto a news website for free, why would I want to pay through this site?" 'No frills' ADSL will hit the market in autumn.