BT's still got the broadband blues

The head of BT Retail has warned that broadband providers face the challenge of persuading internet users with dial-up connections to make the switch to high-speed access.

Speaking to the BBC Pierre Danon, chief executive of the telco's retail arm, predicted that the UK internet audience is unlikely to increase much beyond 50 per cent of the population.

He said that BT's focus was now going to be on getting people to pay for new broadband services, such as 24-hour home surveillance and offering parents access to curriculum materials, in return for a monthly fee.

But the telco has no plans to become a content provider, and will instead set up deals with firms such as Yahoo. Danon said the real battleground would be over how much people would be willing to pay for services.

Danon expressed confidence that BT could still hit its target of gaining half a million customers for its no-frills service by the middle of the year.

He admitted that the company's broadband strategy 15 months ago had been flawed. "The UK was the last country in the world on broadband, nobody was taking it. BT was going through disaster," he said.

And efforts by the regulator to limit BT's dominance of the market had not helped. "By forbidding BT to enter this market, the only thing that was done was to weaken the UK."