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Competition undercuts BT

A new wave of broadband price cuts

ISP's Thus and Virgin this week announced price cuts to their ADSL products, passing down BT's wholesale price reductions to their customers.

Demon will be reducing the monthly fee for two of its business broadband packages. Its Express Plus package will be reduced from £74 to £45 a month while its Express Pro will drop from £150 to £79.

On the home user side, Virgin has cut the cost of its broadband starter pack (which includes a USB modem and two phone filters) from £79.99 to £59.99.

In addition, Thus will be halving the connection costs for both services to £125, while Virgin will be waiving the charge completely, despite the fact that BT's own low-cost activation fee offer (of £60) ended a few weeks ago. This means both services are now considerably cheaper than that of the giant telco.

Despite praising BT's price cuts Thus used the opportunity to echo its disappointment at the limitations of the discounts.

"While we welcome the wholesale price cuts, it is disappointing that we cannot reduce costs for all our business ADSL services," said Phil Male, chief operating officer at Thus.

"BT's price changes only relate to IPStream connections — the wholesale end-to-end service charged by BT Wholesale. BT has not passed on similar price advantages to DataStream services, further more BT has increased some of the infrastructure costs."

Telco watchdog Oftel is currently investigating complaints from Thus and other ISPs over "the disparity in BT's wholesale pricing".

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