BT to unveil cheap broadband offer

LONDON: BT Group said on Monday that it will introduce a discounted

high-speed Internet access package in the coming weeks in a concerted push to

hit its ambitious goal of one million broadband customers by next summer.

BT has temporarily dubbed the new broadband package "Direct". It

said it will provide full details, including prices and which markets it is

intended for, on April 24. "All I can say now is it is seen as a mass

enabler for broadband. It's another way for BT to reach its goal of one million

new broadband connections by next summer and five million by 2006," a

company spokesman said.

The announcement underlines the importance BT has placed on broadband as a

growth catalyst for the indebted telecoms firm. Internet service providers and

telecommunications providers are banking on broadband access, which enables

consumers to surf the Net at speeds of nearly 10 times that of conventional

dial-up connections, to boost their sagging Internet businesses.

The UK has been a laggard in broadband as wholesale rates were, until last

month, too high to stir any meaningful demand. "By offering a no-frills

product, at the bottom end of the price range, it should stimulate market

demand," the BT spokesman added.

Few features



BT gave scant details of the new broadband product, saying only it will
allow customers to connect to the Internet at high speeds, but with only basic

features. It could mean news headlines and an e-mail account would be scrapped,

a spokesman suggested.

Rivals were caught off guard by the announcement. One executive at a

competing British ISP said she was unsure how BT could offer a broadband product

at a cheaper monthly subscription than 29.99 pounds ($42.93), the present market

price, and still manage to break even.

Competitors, including AOL and Freeserve, have pledged to blow the whistle on

BT should they find evidence that the former monopoly is unfairly

cross-promoting its own ISPs, including BT Openworld, and now the

"Direct" offer.

Last month, BT chief executive Ben Verwaayen announced a cut in wholesale

broadband rates by roughly half to 14.75 pounds. Rival ISPs responded by cutting

the retail price by, on average, 10 pounds to 30 pounds. BT said on Monday that

wholesale broadband orders are currently running at more than 10,000 per week.

BT made the broadband announcement on Monday as the company unveiled a

larger, three-year corporate plan to continue cutting costs and focus on

strategic growth markets.