Zen: BT’s fibre prices are too low

PC Pro award-winning ISP Zen Internet claims BT has been too aggressive with its fibre broadband prices.

BT Retail, the consumer-arm of BT, revealed last month that it would be offering up to 40Mbits/sec fibre-to-the-cabinet (FTTC) connections from only £20 per month. That’s only marginally more expensive than its ADSL2+ lines, which cost a minimum of £16 per month (after introductory offers).

Yet fibre is much more expensive than ADSL2+ for ISPs who rent lines from BT Wholesale – a separate division in BT which sells broadband access to internet providers, including Zen and BT Retail.

ISPs are charged a minimum of £5.88 for an ADSL2+ line, while the mimimum charge for fibre varies between £13 and £17 depending on the option taken.

BT has been very aggressive with its fibre prices. It will be difficult for us to be as aggressive on pricing

Speaking exclusively to PC Pro, Zen Internet’s Andrew Saunders said he was surprised that BT had gone in so low. “BT has been very aggressive with its retail prices,” said Saunders, the ISP’s head of product development. “It will be difficult for us to be as aggressive on pricing.”

When we asked BT why its fibre prices were so close to ADSL2+, it replied: “BT Retail has come up with a very competitive offer in order to stimulate take-up of its fibre-based broadband service”. It added that each ISP was at liberty to set its own retail price.

Zen has yet to announce its fibre prices, but Saunders confirmed that the Rochdale-based ISP will offer residential and business tariffs, with both split into tiers based on upload speeds of 2Mbits/sec and 10Mbits/sec. “BT’s set the stall out for the market,” Saunders said.

Bigger than broadband switch

Zen has been involved with BT’s fibre trials since they first began last summer, and claims that they went “really, really well”.

Saunders claims the upload speeds are going to make the biggest difference to both consumers and businesses, with services such as videoconferencing and VoIP becoming more widespread.

“It [the fibre rollout] could be more significant than the change from dial-up to broadband,” Saunders claimed.

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