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Broadband: U.K. sees double

As broadband prices have dropped in the United Kingdom, takeup has more than doubled since the start of 2002.

Broadband takeup in the United Kingdom has more than doubled since the start of 2002, leading to optimism that the vision of Broadband in Britain is finally becoming a reality.

Figures released by the Office of Telecommunications--the U.K. telecom regulator known as Oftel--this week show that at the end of June 2002 a total of 709,000 consumers and small and medium-sized businesses had signed up for a broadband connection. This is an increase of some 113 percent compared to the start of the year, when there were only 332,000 broadband subscribers.

Both cable broadband and DSL have seen an equally strong boost in demand. There are now 290,000 ADSL (asymmetric digital subscriber line) users and 419,00 cable broadband users, compared to 136,000 ADSL and 196,000 cable users at the beginning of January.

This boom in broadband takeup follows the BT Wholesale's ADSL products, the creation of a self-installation ADSL kit, and the launch of 1MB broadband services from broadband providers Ntl and Telewest Broadband.

E-commerce minister Stephen Timms welcomed this latest evidence that the United Kingdom's broadband future is looking healthy.

"Oftel's latest figures highlight a key step toward Broadband Britain. Takeup has soared over the last six months and with prices as low as ?20 ($31) a month, broadband no longer has to be a distant dream. We must now use this momentum to increase coverage and develop valuable, exciting content," he said.

But some in the industry are concerned that the surge in broadband takeup may begin to trail off in a few months. Before BT Wholesale's price cuts and the launch of do-it-yourself broadband, ADSL services cost around ?50 ($77) per month on top of a ?150 ($232) installation fee. Now that services cost between ?22 ($31) and ?30 ($46) a month and some Internet service providers are subsidizing the equipment and start-up costs, many Internet users who had been put off from getting broadband last year because of the high prices are now signing up.

Once this pool of price-conscious Internet users is exhausted, there will need to be plenty of compelling broadband content if BT's target of 5 million broadband users by 2006 is to be hit.

Even with 709,000 end users signed up, there is still a massive untapped broadband user base. Oftel's latest figures mean that only 6 percent of home users with Internet access are using broadband.

ZDNet U.K.'s Graeme Wearden reported from London.