BT tests water with rural ADSL project

Releases 'indicative pricing'

By Tim Richardson • Get more from this author

Posted in Telecoms, 12th February 2003 18:31 GMT

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BT is to confirm next month whether it will proceed with a scheme that could bring ADSL to areas currently deemed not commercially viable for investment in broadband.

Last autumn the telco began a trial of a community broadband project, which makes it financially possible to convert an exchange to ADSL with just 16 customers.

The initiative, known as ADSL Exchange Activate or Community Broadband, also uses "sponsors" such as development agencies and local authorities to help subsidise the cost of rolling out the ADSL service.

BT has recently released "indicative pricing" to ISPs and potential sponsors in a bid to test the market and assess whether there is enough interest. If there is - and BT is "hopeful" - then the telco is likely to press ahead with the scheme.

Key to this is the pricing. It's set the price at an upfront charge of £55,000 (ex VAT) per exchange, which will pay for 30 people to get ADSL for three years.

This works out at a wholesale cost of around £50 (ex VAT) per user over the three-year term of the contract. With the ISP's margins on top this could lead to a retail price of between £60 and £70 per user.

However, as BT points out, if part of this upfront cost is offset (subsidised) by a "sponsor" then the retail price to consumers could come down below £30 a month in line with mainstream broadband prices.

With all the "ifs" and "buts", it explains why BT is still testing the water to see if the scheme will actually make it in the real world. ®