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80,259 News Articles

Broadband's too pricey

Will someone please tell Douglas Alexander?

Broadband internet access is still too expensive and home users don't want it until it's cheaper, according to a new study from research firm GartnerG2.

GartnerG2's study of European countries revealed British, German and French people were simply not prepared to pay twice the amount of normal internet connections to receive broadband.

Despite his 'attempts' to increase broadband internet take-up in the UK, e-commerce and competition minister Douglas Alexander has done little, if anything, to bring down the cost for consumers.

After announcing £30m funding — twice — last year and accepting only some of the recommendations put forward by the Broadband Stakeholders Group, which he chaired, the broadband boom we were promised still hasn't happened. And, say analysts at GartnerG2, it isn't going to for a while.

Rumours abound that BT's new chief will announce broadband price cuts on Thursday but, according to the report, lower fees will only occur once a significant number of people have bought the service and firms have invested enough cash.

"Where are the new applications and new content that would persuade consumers to pay a premium?" said the report's author analyst Adam Daum.

"Unless operators can define profitable new applications, media companies and e-marketers should put their European broadband investment plan on hold," he added.

Less than 10 percent of households with internet connections said they would be upgrading to broadband within the next three years, most stating value for money as the reason.

Subscription fees in the UK are around £35-£40 a month with only a few companies taking time to develop content specifically for broadband users.

But, according to the report, the majority of broadband users are not prepared to pay even more for broadband services, such as gaming, which in turn means companies are less like to invest in broadband networks.

Daum predicts that by the end of 2005, 70 percent of UK households will still be using a narrowband connection. Not quite what the government would hope for.

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