BT Wholesales recent price 'rejigs' appear to have done little to calm down some of its competitors. ZDNet UK is reporting that The Broadband Industry Group comprising of Brightview, Cable & Wireless, Centrica, Energis, Freeserve and Tiscali is to pressure BT and Oftel into further reducing the price of the Datastream product range.
The group hopes that the price reductions will enable the companies to compete better with the BT IPStream products (such as the popular Home 500 and Office range). The Datastream package is currently used by Tiscali for its 150kbps start-up product priced at £15.99/mo. The Bulldog Datastream based 1Mbps product retails for £29.36 compared to £32.89 for its IPStream Home 1000. This price differential suggests that either they are running at a loss, or it is already in the favour of Datastream.
There are several questions yet to be answered. If these providers get significant price cuts will they be passed on to the consumer, or will it mean products that are currently loss leaders become profitable? Additionally, if BT Wholesale is forced to cut the cost of its Datastream products will it thus have less money to invest in new network infrastructure? If there are price cuts amounting to a couple pounds at the low end of the market, we will actually see broadband retailing for less than many dial-up packages.
Lets hope that the pressure applied to Datastream pricing is not vented elsewhere similar to what has already happened to BT IPStream Office 2000 when it increased from £38 to £43 per month.
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