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Cost of fast surfing could be halved

But will new BT chief back broadband price cut?

The new chief executive of BT is widely expected to announce on Thursday the company's intention to cut its broadband wholesale prices by half in an effort to revitalise not just BT but the broadband market in the UK.

The rumour comes hot on the heels of research firm GartnerG2's recent survey which revealed that Brits aren't prepared to pay double for the privilege of a faster connection.

But some industry watchers are saying a cut isn't just unlikely — it's not legally possible considering BT's debts or regulatory position. Since telco watchdog Oftel has not officially heard from BT about possible price cuts it seems more likely that, if BT's new chief does intend to reduce prices, it is this intention that will be announced.

Reports in The Guardian and The Sunday Telegraph newspapers indicated that Ben Verwaayen (pictured), who officially took up his new post last Friday, will concede in his remarks about the company's third-quarter financial report on Thursday that the UK has failed to live up to its potential as a leader in the broadband internet access market, but will pledge to put the company and the country back on track.

"Verwaayen will speak at the Q3 results on Thursday and give his general thoughts. Broadband will certainly be one of his priorities but he's only been in the job a week. These reports need to be treated as speculation," a BT spokesman said.

Verwaayen, a Dutch national who turns 50 this month, was previously the vice-chairman of Lucent Technologies and senior executive for Dutch carrier KPN.

Telco watchdog Oftel would have to approve any move by BT to cut its prices. In the past, it has been critical of BT for attempting to undercut competitors that were offering broadband through BT's wholesale services or through co-location sites where the local loop, or 'last mile', has been or is being unbundled.

If BT wished to cut its broadband prices, it would have to give the regulator 28 days notice before doing so. Oftel said it has not been contacted by BT about any such plans.

"We would be pleased overall to see any price reduction, granted that BT operates within the bounds of current regulation. But until we see the proposal, there isn't a whole lot that we can comment on. We will, of course be playing close attention to BT's results and any other announcements it may make on Thursday," said an Oftel spokeswoman.


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