Cheaper modems to fuel broadband boom
Published: 05 Dec 2001 17:11 GMT
Take-up of high-speed Internet services in the UK could soon be boosted by a significant drop in the cost of ADSL modems -- a development that would make self-installation broadband packages more affordable for consumers.
Self-installation broadband services are currently being tested, with a commercial launch planned for January next year. They will be cheaper than today's home ADSL services, and many in the telecoms industry have claimed that it will increase the number of broadband customers.
There are concerns though that with ADSL modems retailing for over £100, customers could be put off -- but Dr Peter Radley, chairman of Alcatel UK, told ZDNet UK on Monday that he was confident that increased demand for DIY broadband would soon push prices down.
"Look at the way that prices came down for GSM phones," said Radley, whose company makes one popular model of ADSL modem. "That's the best model to compare the ADSL modem market to, I think. Once there is increased demand the prices will come down," he added.
Radley, a member of the Broadband Stakeholder Group (BSG), was speaking shortly after the government announced it was accepting all but one of the BSG's recommendations on Britain's broadband policy. The UK is currently bottom of the G7 in terms of broadband take-up and the BSG has warned that decisive action must be taken now on many levels.
DIY broadband services will be cheaper because customers don't have to pay up to £150 for an engineer to visit their home. Instead, the ISP will post an adapter that fits into the phone socket and splits voice traffic from data traffic. Users must have also bought an ADSL modem -- possibly also from ISP -- that links their computer to the adapter.
There is a £50 fee to cover work that must be carried out at the local exchange, but customers should recoup that within one year as the self-install product is predicted to be £5 per month cheaper than today's ADSL packages.
Modems by post
Fujitsu recently announced that it has developed a cheaper ADSL modem. Its FDX310 USB Modem contains an adapter -- called a microfilter -- and an ADSL modem, and can be posted to customers. The FDX310 will cost £80, but Fujitsu hopes that ISPs will absorb that cost in order to tempt users onto broadband.
Nigel Garnham, Fujitsu's DSL product manager, told ZDNet UK that his company is "already there on price". Garnham explained that the FDX310 would be sold through ISPs initially. "It'll go on sale on the high street when self-install becomes the norm -- we hope", he added.
Justin Fielder, Easynet's local loop unbundling manager, claimed yesterday that self-installation broadband was the best way for ADSL to become a mass-market consumer product.
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