By Graeme Wearden, 15 December 2003 18:10
NEWS 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
Comments
There are 7 comments. Join the discussion
1. anonymous
Wouldn't it be better to keep prices where they are and make BT enable EVERY exchange for broadband? As it is, people like me are becoming increasingly annoyed at the lack of broadband in our area whilst the lucky few get better and cheaper access.
2. Dixon Jones
I want quality of service, not price reductions.
Frankly, £30 per month (or less in some areas) is not expensive when you are running business from it. What IS expensive is if it goes down for an hour or two on Friday afternoons.
I think the country has got over obsessed on price, and this will have a real COST (much greater cost than the saving) on small businesses.
For us, it means we have had to buy ADSL AND a Cabel Modem just to give us the redundancy we require. Makes us much more robust, but it was only due to the cost of downtime that we decided to spend double what everyone else spends.
3. Iain Stocks
No point in lowering the price of something that is not available in the village that I live.
Tell me first when it will be available to use?
4. Darren Long
I agree with the other comments.
Availability is more important than cost right now. By this, I mean both geographic availability and the ability to maintain a decent connection - an issue for both BT and the ISPs.
We should demand 5 9s (99.999%) availability on the services which we are currently paying for, and an infrastructure that supports fair use.
Daily and weekly capping by ISPs (Virgin Net to name mine) for ADSL traffic is not in the spirit of broadband and should be a concern for all.
Also worthy of mention is the contention ratio, which is typically (I believe) 20:1 for domestic users. AFAIK, contention is not a significant issue at the moment, but if uptake increases as it has been, it wo'nt remain insignificant for long.
So, to summarise...let's all get the service that we are (or would welcome the oppurtunity to be) paying for, before we force price cuts that will prevent the service from being what it should be.
5. Simon Hobson
I agree with Graeme Wearden, prices are already too low ! Anyone remember the early days when a whole host of companies were talking about all sorts of innovative offerings based on Local Loop Unbundling - heck I even got offered an 8M symmetric connection, over copper, and a likely future product.
Then 'someone' stuck their oar in and insisted on price cuts and made just about all of these alternatives financially untenable - which leaves us where we are now, with just about every ADSL product being essentially a packaged BT product with little innovation.
And as one of those who now has it (as of a couple of months ago), I still say that the service is too cheap to allow enough profit margin for innovative services and universal availability.
6. Alan Gairdner
How selfish the previous comments have been!
Just because they have a poor service or no service they don't want people, who can't afford broadband, to have it.
Its not unrealistic to ask for a better service, wider availability and lower prices.
One aspect of the service shouldn't depend on the others.
7. Darren Long
Alan, What do you want? ratner.net...selling cheap crap to the masses?
If you cap the costs now, when coverage is poor, you will degraded performance in the cities and less chance of a roll out into those hard-to-reach places.
After the french revolution, someone apparently (please excuse my historical ignorance here) said "let them eat cake." We'll i bet you that some people had a nicer cake than others.
If you want it cheaper, go to Tiscali and get a lower rate connection. You get what you pay for in this world.