SMEs will have to pay more for their ADSL after BT increased the wholesale cost of its business class broadband products.

In a circular to ISPs yesterday, picked up by the most excellent ADSL Guide (http://www.adslguide.org.uk), BT said the increase to its BT IPStream Office and BT IPStream S products would come into effect on 1 September.

The wholesale price rises, which exclude VAT, are:

• BT IPStream Office 500 up from £18 to £20.41 a month
• BT IPStream Office 1000 up from from £28 to £32.64 a month
• BT IPStream Office 2000 up from £43 to £57.00 a month
• BT IPStream S 500 up from £23 to £25.41 a month
• BT IPStream S 1000 up from £33 to £37.64 a month
• BT IPStream S 2000 up from £48 to £62.00 a month

Said BT in the memo: "These are the first end user rental price increases we have made since the launch of our broadband portfolio and have been introduced to further define BT IPStream Office and BT IPStream S as business class products in the Standard pricing structure."

A BT spokesman told us: "We didn't think it [the price rises] would be popular but it is something we had to do."

Last month, research from Frost & Sullivan found that broadband providers simply don't understand the needs of SMEs and were missing a trick. The experts reckon the small and medium-sized enterprise (SMEs) market is largely untapped at the moment, giving broadband service providers a whopping opportunity to attract new business customers.

Snag is, broadband service providers need to work a little harder and be more inventive if they want to sign up small businesses to high-speed Net access. And price hikes are unlikely to help. ®

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