BT's business Internet access division won't be offering its latest high speed Internet service to small businesses because it says its parent BT has made the service too expensive.
The revelation from within BT comes after widespread criticism of the pricing of asymmetric digital subscriber line (ADSL) from numerous third parties planning to sell services using the new high speed technology later this year. (see Newswire 30 July)
BT announced its ADSL roll out to major UK cities in July, promising "always on" Internet access at up to 40 times the speed of current dial up modems. BT will not sell the service direct, but through service providers, such as its own ISP division.
But with wholesale prices set at £40 to £150 per customer, per month, critics have said the service will be too expensive for consumers and small businesses. Uunet, which plans to offer an ADSL service, has threatened to take the matter to telecoms watchdog Oftel. see Newswire 24 September
Today, in a surprise move, BT's own business Internet division joined the backlash, saying the service will be too expensive for the small business market.
"At the moment I don't think ADSL pricing is positioned to make much inroads in that market," said Grant Broster, head of BT Internet Business Services. "We're talking to [BT] and if it is priced attractively, we will certainly be introducing it."
But Broster said that pricing aside, there isn't the demand for ADSL among small businesses, which he said typically only use the Internet for a few hours per week.
Uunet DSL product manager Steve Groves hit back saying there is a demand for ADSL among small businesses, but there won't be a market unless prices fall.
"I think there is a genuine demand, if the pricing is right. A lot of people don't use the Internet as much as they would like because they're worried about phone bills. If the knew it was flat rate, that would be one worry removed," said Groves.
Analyst Robin Duke-Woolley at Schema said he agreed with Broster's opinion that the pricing is too high for small businesses.
"It does look a little high at the moment and [BT] might want to look at that to create a strong market," said Duke-Woolley.
"They also have a problem because they've got Highway [BT's ISDN product for homes and business] and they might want to sell as much of that as possible while they can," he added.
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