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UK broadband prices ‘too high’ says BT Retail boss

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The chief exec of BT Retail has admitted that the cost of broadband in the UK is too high.

Taking part earlier today in an online chat session discussing the "Digital Divide" Pierre Danon said there is the desire within BT to cut costs.

Asked whether BT had any plans to cut its prices Monsieur Danon said: "Yes there are. I agree with you that today consumer prices especially are too high.

"There is today an immense effort within BT to reduce costs - for example, we are planning to introduce self-install within a couple of months.

"We have to reduce costs before we reduce prices which I'm sure some operators in the UK or the world are not doing.

"We have already shown to the market that we intend to reduce price by reducing our wholesale price a couple of months ago. You can be sure we will continue," he said.

He added later on: "I do not intend to make any price announcements today but we are committed to significantly improving the overall attractiveness of the service and cost is just one element. Watch this space!!"

Elsewhere, he gave a cool response to suggestions that BT's universal service obligations (USO) should be expanded to include broadband, arguing that while he supported the USO, extending its scope would have a "detrimental effect on BT's ability to continue to offer a range of broadband services at an economic rate".

He continued: "But I do share your frustration that broadband take-up is lower in the UK than elsewhere. This is partly because we already have low Internet access prices but partly because of the way we are regulated."

This assessment of slack broadband demand - echoed by BT chief exec, Sir Peter Bonfield last week - is at odds with independent assessments of problems facing the UK's broadband marketplace.

Unpublished research conducted by Analysys on behalf on the Government's Broadband Stakeholder's group seen by The Register suggests that it is the three million or so unmetered Net access users who will drive demand for broadband.

Far from being an impediment to the take-up of broadband - as expressed by Monsieur Danon - flat-fee services will create a stepping stone for consumers between pay-as-you-go services and always on broadband.

The report says: "The high levels of take-up of flat rate services in the UK indicate that if the [price] gap between broadband and flat rate user is reduced, or compelling applications emerge, then the UK could see a fast migration of flat-rate users (who are experienced in paying monthly fees) over to broadband." ®

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