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BT has confirmed it is to cut the cost of its broadband products in a bid to halt falling market share.

In doing so, the UK's dominant fixed-line telco is also capping all of its ADSL services in a move that might make some of its customers think twice before signing up to BT's broadband service.

Both of BT's 512k services now have a 15GB a month cap, with its 1Mb service lumbered with a 30GB limit.

BT says that the "vast majority" of people will be unaffected by the cap and that only between 3-5 per cent of its punters are bandwidth hogs. But BT's decision to cap all customers because of a minority who are abusing the service has already drawn criticism from rivals.

An AOL UK spokesman told us: "The capping of services causes concern among consumers about limits on usage and possible surcharges. We believe that most people will prefer the comfort of flat-rate Internet access."

And on the issue of price, there are also suggestions that BT has missed a trick. While BT has cut the cost of its wires-only, frill-less BT Broadband (512k) package, BT Yahoo! Broadband 512k and BT Yahoo! Broadband 1Mb, the monthly charge for its capped BT Broadband Basic service remains fixed at £19.99 a month.

BT's reluctance to cut the monthly fee of its entry level DSL product comes as research shows that both its share of the UK's DSL market - and its share of new customers - is shrinking. What's more, research shows that the biggest growth areas for DSL are aggressively-priced, entry-level products such as Wanadoo's £17.99 a month service.

Despite this, BT reckons its price cuts are competitive and give customers the "best ever value broadband from a name you can trust".

BT's new prices, which come into effect from 1 July, are as follows:

BT Broadband (512k) - down from £27 per month to £24.99. BT Yahoo! Broadband 512k - down from £29.99 per month to £26.99. BT Yahoo! Broadband 1Mb - down from £40.99 per month to £29.99. BT Broadband Basic (512k) - remains at £19.99 per month but with free modem and connection. ®

Related stories

BT's DSL market share carries on falling
BT to cut broadband prices for punters
Make BT more transparent, say rival telcos

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