As widely predicted by a number of IT pundits, BT Wholesale has today announced wide ranging price cuts and additionally laid out its plans to increase Broadband coverage to upto 90% of UK homes.
As can be seen the price cut on the standard Home service is minimal, it would not be surprising if most Service Providers use this price cut to provide better services like longer support hours, or to subsidise the activation fee. One certain fact is that we are likely to see the ultra low-cost providers now fighting it out to see how low they dare to go again.
The drops in the price of the Office products will be where we see providers making the largest cuts, there is scope for a 2Mbps 20:1 Office service to now retail at £60 to £80 a month. Which given it is available now across the country may put the pressure on the 50:1 2Mbps services that are just starting, and retail around the £40 mark. One small world of caution before people have a party - BT details the price cuts as some of the price changes, therefore it is lucky that some costs may have increased. Ben Verwaayen makes the point that a lot of the price cuts are down to the economies of scale, particularly as the number of ADSL users has just passed the 800,000 mark.
Activation fees remain the same at £50+VAT for the wires-only services and £210 and 260 for the engineer assisted installs. Interestingly there is a mention of a discount scheme, which is only fleshed out on the BT ServiceView website it appears that Service Providers may be able to get a discount of upto 2% on the end user rentals if the annual purchase from BT Wholesale for ADSL lines is higher than £14,000,000. The discount is 1% for those between £2,000,000 and £7,999,999 and 1.5% for those inbetween the 1% and 2% figures. The baseline figure of £2,000,000 equates to an ISP with around 13000 Home ADSL users, and 1% of this figure is only £20,000.
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