BT pricing poses threat to UUNet ADSL

One of the UK's largest business internet service providers, UUNet, is considering cancelling its launch of corporate ADSL services because of prohibitive BT pricing.

One of the UK's largest business internet service providers, UUNet, is considering cancelling its launch of corporate ADSL services because of prohibitive BT pricing.

BT is offering ISPs two levels of service for its wholesale ADSL rollout at the end of March. It will charge ISPs £35 a month and a £150 one-off fee for IPStream which will give the user 512Kbps bandwidth downstream and a dynamic IP address. For its business service, Datastream, it will charge ISPs between £80 and £150 a month, with bandwidth between 512Kbps and 2Mbps. UUNet said last September that it had intended to launch a Datastream service in March, but a lack of customer interest has stalled the trial.

While the final decision of whether to go ahead still hangs in the balance, Mark Cook, UUNet's internet strategist, said: "Our larger corporate customers are not interested in Datastream because it would be almost as expensive as leased lines, but without the service guarantees. We'll only roll out the service nationally if we can deliver it at a price customers want."

Demon internet, meanwhile, is charging £35 a month for its Datastream trial. A spokesman said the trial is popular but hinted that its current price will not necessarily reflect the actual price.

Scott Moore, senior research analyst at IDC, said BT was delivering ADSL services at prices "way above" other European carriers leaving ISPs to subsidise the cost of services.

Richard Gorbutt, currently involved in a corporate trial of IPstream, said: "IPstream is also too expensive for what it is. I have got 512Kbps speeds sometimes but when there is a high contention it dropped to as low as 4Kbps and more often 50Kbps."