As British Telecom executives hinted at earlier this month, the United
Kingdom’s incumbent local exchange carrier (ILEC) plans on slashing its
broadband prices this week to spur residential growth in the country.
The BBC reported Monday afternoon a company spokesperson confirmed the
telephone company would make cuts of up to 25 percent for asymmetrical
digital subscriber line (ADSL) pricing to customers and resellers in the
coming days.
ADSL is the least-expensive form of DSL technology, giving consumers
download speeds between 512Kbps and 2Mbps and upload speeds around
256Kbps. Direct BT ADSL service generally runs $47 a month. According to
the report, BT Openworld will drop its price for ADSL for the consumer to
roughly $40 a month.
BT Openworld has been notorious for its expensive ADSL service, especially
in the wholesale arena, where Internet service providers (ISPs) generally
pay around $42 per month for each line. European ISPs like FreeServe and
America Online hope the wholesale rates drop to approximately $28 per line
per month, allowing them to resell the service to customers in the $40
monthly price range.
That stands head and shoulders over other telecom prices in
Europe. Telecom Italia, with the second-highest pricing, charges roughly
$31 a month to its ISPs and $37 to its customers. But it’s still less than
the prices charged by U.S. telecoms like SBC Communications and Verizon Communications
, which have been
steadily increasing DSL rates the past year.
The hefty price tag has kept many users from adopting broadband
services. BT, despite DSL-enabled central offices (COs) throughout 60
percent of its coverage area, has only 140,000 customers to date.
Earlier this month, BT officials launched an initiative with businesses in
the rural part of the U.K., Cornwall, to provide ADSL services with
computers and training to local enterprises. They promised to equip up to
12 COs with DSL access multiplexers (DSLAMs) to provide broadband service,
part of a $17.8 million technology project for the region.
The initiative is part of the telecom’s goal to open up more rural
communities to DSL service, which BT officials say is cost-prohibitive to
deploy on their own.
“Cornwall could be the blueprint for the development of broadband in other
regions of the UK where, without this kind of partnership approach,
deployment is currently uneconomic,” said Pierre Danon, BT Retail chief
executive officer.
