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BT is cutting wholesale prices for ISPs running rural ADSL broadband services.

The aim is to encourage the conversion to ADSL broadband of 600 small exchanges which have no trigger target set under BT’s broadband demand registration scheme - In other words, in areas where BT currently deems ADSL commercially unviable.

In July 2003, BT introduced a new service, called ADSL Exchange Activate, to enable rural community-minded ISPs to set up services for up to 30 users.

The telco talks about a successful trial involving eight exchange areas, but we wonder what the take-up for Exchange Active has been since then, considering the hefty upfront payment required.

This will now cost the ISP £25,000 in upfront payment, down from £45,000, for 30 users over three years. However the ISPs must now also pay connection and monthly line rental charges at "the prevailing rate" for BT IPStream Home 500. This is £13 per month, says Reg reader Richard Wilson, who helpfully supplies the arithmetic.

  • Rental charges are 30 customers x 36 months x £13 = £14,040.
  • Connection charges are 30 customers x £50 = £1500.
  • Total cost of equivalent to the old product = £25,000 + £14,040 + £1500 = £40,540.

So the price cut is just under £4,500 - around £10 per cent - and there's less drag on the cashflow. Is it enough?

Additional blocks of 30 users will cost ISPs £10,000 upfront, down from £30,000. ®

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