BT is encouraging other service providers to use these savings
to set better prices for consumers and businesses. It is also
searching for partnerships to extend broadband to less commercially
viable areas. The company is aiming for one million ADSL broadband
connections by summer 2003. At present, there are only 145,000
users.
The UK has one of the lowest take-up rates of broadband access
in Western Europe. BT’s current prices have taken much of the blame
for this. Currently, consumers can expect to pay around £40 per
month for BT’s broadband products. This compares to charges of
around £25 for cable broadband services from NTL and Telewest.
In what is being seen as his first significant strategic move
since becoming Chief Executive of BT, Verwaayen said:
"Broadband is the future for Britain and
we're putting it at the heart of BT's plans for growth in the UK
mass market. This will drive the whole market forward by making
broadband affordable, attractive and accessible.
"This is a stretching programme, but
achievable. Through substantial reductions in the cost of providing
service we can set prices that will stimulate the market strongly,
and make money on it. This is a sustainable business model."
Paul Reynolds, CEO of BT Wholesale added:
"We have now achieved the price that service
providers told us they needed to get end user prices below £30. We
have made sustained improvements in network service levels in
recent months and are taking action on automation to help service
providers to improve the customer experience even further. We
expect these new low prices to drive up demand for broadband. Now
the momentum for broadband take-up should build. Today's
announcement is a first step, but a significant one."
