BT boss rules out broadband price cuts
Published: 10 Sep 2002 15:31 BST
BT's chief executive Ben Verwaayen has ruled out cutting the price of consumer broadband in the UK, and insisted he is not concerned that the head of Ofcom has supported the break-up of BT.
Speaking to journalists on Tuesday, Verwaayen said that BT's wholesale broadband prices were already low enough to support a successful broadband market in the UK.
"Price is not a major issue. If you look across the European Union, our broadband prices are pretty good already," Verwaayen said.
"We've already taken a hit on prices earlier this year," Verwaayen added, referring to BT's decision in February to cut the cost of its wholesale consumer broadband product to £14.75+ VAT per month. This made it possible for ISPs to sell broadband to consumers for less than £30 a month, and sparked a boom in broadband take-up in the UK.
Verwaayen, who joined BT at the start of this year, also played down the suggestion that BT Retail and BTopenworld might soon merge -- a move that would enrage some parts of the UK telecoms market.
BT Retail will launch a "no-frills" broadband product called BT Broadband later this month, and is expected to capture a large section of the UK's broadband market. Angus Porter, managing director of BT Retail, was quoted this week speculating that BTopenworld -- currently BT's only broadband ISP -- might be forced to merge with BT Retail if BT Broadband is a big success.
Verwaayen insisted that "the market will decide" whether BTopenworld and BT Retail can both offer broadband -- something that he believes makes sense. Some in the industry have suggested it is daft for BT to own two competing broadband service providers, but according to Verwaayen this is not a problem.
"It's like when Ford launched its second motor car. Since when did Ford have a problem selling more than one car," Verwaayen said.
Split critic
BT has been widely blamed in the past for the slow rollout and take-up of broadband in the UK, and some critics have claimed that the company should be made to split its wholesale network business from its retail operations.
BT has repeatedly insisted that this is not necessary, but it emerged last week that Lord Currie -- the head of Ofcom -- wrote a report earlier this year that said that such a separation should be given "careful consideration".
Ofcom will take over the regulation of BT in 2004, but Verwaayen does not believe that the idea of splitting BT makes sense.
"A lot of things have happened since that report was written," Verwaayen said, adding, "the idea of splitting BT is a dead horse that doesn't bring the benefits that some people think it brings."
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