BT reassures City but scares ISPs

By Graeme Wearden, ZDNet.co.uk, 9 April, 2002 14:45

NEWS

While investors have reacted quite calmly to the details of BT's new three-year strategy plan, the telco's plans for a "no-frills" broadband product have worried some members of the ISP community. Shares in BT slipped slightly after chief executive Ben Verwaayen said on Monday that he would focus on customer satisfaction, cost control and broadband, falling from 277p to around 260p by Monday afternoon. The shares have since recovered to over 270p by Tuesday lunchtime, after some City institutions said they expected the share price to rise in the near future. ABN Amro said on Tuesday it was sticking with its advice to investors to add BT shares to their portfolios. The banking group said it expected the stock to reach 300p. Morgan Stanley was a bit less optimistic -- saying it valued BT's shares at 280p, up from its earlier valuation of 250p. Japanese investment bank Nomura, though, was less impressed, and has cut its BT Group "fair value estimate" to 268p, down from 287p. Another financial group, Goldman Sachs, advised that BT's shares are approaching "fair value", but said that it was cutting its forecast of BT's earnings per share from 8.7p to 8.3p -- despite Verwaayen saying he was committed to raising the return that BT shareholders receive. The word from the UK's Internet Service Providers, though, is less restrained. Some are understood to be deeply concerned that BT Retail's plan to launch a cut-price high-speed Internet package could cause significant damage to their businesses. Although precise details of this "direct broadband" product won't be released until later this month, experts believe that it will give users a fast Internet connection without the various services -- such as Web space, customer support and email -- that ISPs also provide. There is now concern that this product could force ISPs out of business, if customers decide they would rather pay less money and just get a broadband connection, and then look to other companies for additional services. One ISP has claimed that BT is abusing its market position and is looking to win a monopoly on broadband supply. BT has denied that the "no frills" product poses a threat to ISP, and claimed that it will encourage them to create services and content that will tempt customers onto their value-added broadband products. "This product will only give high-speed access, so users will be able to move from it to an ISP if they want extra services. We think this will encourage ISPs to create compelling broadband content," explained a BT spokesman. BT also promised to ADSL-enable another 100 local exchanges. This news was welcomed by the government, at a time when many MPs are understood to be increasingly concerned that consumers in some rural areas have no access to affordable broadband. "I very much welcome the confirmation from BT that broadband is at heart of their strategy and the news that 100 more exchanges will be ADSL enabled. These announcements mark another step forward for broadband roll-out in the UK," said e-commerce minister Douglas Alexander in a statement.

See the Broadband News Section for the latest on cable modems, ADSL, satellite and other high-speed access technologies, including a comprehensive guide to the best deals out there. Have your say instantly, and see what others have said. Go to the Telecoms forum. Let the editors know what you think in the Mailroom.

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

ZDNet UK Live

How dare film makers, artists or anybody that invests in creativity stop us pirating their works for free. I want to be able to walk into my local...

5 hours ago by JCB33 on ACTA stumbles in Germany

@GrueMaster. I prefer horses for courses rather than one size fits all. I, and I suspect most other computer users, do not really wish to have...

7 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint

The product that scares me every time I have to use it is the Office 2007 version of Excel. The first bug that I found was applying the median...

7 hours ago by greycynic on Ten flawed products that derail productivity

Nice review and very informative. One thing I'd like to add (in reply to whs001's 1st question), the main reason to have the same interface from...

9 hours ago by GrueMaster on A tale of two distros: Ubuntu and Linux Mint

I'be been using Mint 12 since the RC came out, and I am far more happy with the Cinnamon, the Mate, and, yes (with extensions), theGnome 3...

10 hours ago by Frederick Wrigley via Facebook on A tale of two distros: Ubuntu and Linux Mint

Excellent article. One small correction, though--although a fresh installation of Linux Mint 12 will, indeed, provide the user with a version of...

10 hours ago by bdantas on A tale of two distros: Ubuntu and Linux Mint

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

11 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

11 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material

For Gnome 2 die-hards, it is possible to add icons to the bottom panel (or top top panel, if you prefer) which provide the exact Gnome 2...

12 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint

Your comments would seem pretty naive and immature. Your 'solution' appears to be, "gee, let's all just give in to the hackers and give them...

12 hours ago by ramwellian on Cloud computing security: no more oxymoron?

"Interesting thought ... If you installed Win7 as a dual boot on a machine that previously only had Linux, and it wrecked your Linux installation,...

12 hours ago by BugStalker on Windows 7 Declares War on GRUB

This is an excellent summary of Ubuntu and Mint and the interface differences between them. Most such articles take a very partisan position for...

12 hours ago by whs001 on A tale of two distros: Ubuntu and Linux Mint

@ewallace. Not so clear. Anyone can obtain the text, for example from here http://www.ustr.gov/webfm_send/2379. I support ACTA so long as it and...

12 hours ago by Moley on ACTA: Facts, misconceptions and questions

I think WinRT is fantastic. I just wish it was an option for people that didn't want to go through Microsoft's App Store with its attendant...

16 hours ago by 45283 on Why Windows 8 needs architectural hygiene for WOA

Nine people? £30m? Who's back pocket is that lot going in? And IF they say it is for new buildings, what about all the ones the government has...

17 hours ago by Burn-IT on Police set to launch three £30m e-crime hubs

Just to be clear, nobody knows what is in the text of ACTA, here is a photograph of the text of ACTA http://twitpic.com/8h9iju as submitted to the...

17 hours ago by ewallace on ACTA: Facts, misconceptions and questions

Unfortunately main issue is that ASUS is refusing to accept that they make some mistake on this version of asus Transformer prime. 1 - GPS sensor...

18 hours ago by fgvrg56 on Asus Eee Pad Transformer Prime Wi-Fi & GPS problems?

@Marcus A fair question. Just talked with Archos which said it was working on an announcement for next week....

19 hours ago by Ben Woods on Archos confirms G9 Ice Cream Sandwich update schedule

Any update on this, considering the claimed "first week of February"?

20 hours ago by Marcus Karlsson via Facebook on Archos confirms G9 Ice Cream Sandwich update schedule

Bill Goodrich : Just as al_langevin pointed out, with Windows Server 2008 there is no Services for Macintosh anymore. It's gone, not available....

1 day ago by apexwm on Windows Server 2008 drops the ball for Mac compatibility

Featured white papers

Latest jobs

BT reassures City but scares ISPs

Daily Newsletters

Topics

Related stories

BT expands broadband rollout

BT to sell cut-price broadband product

Ofcom to make it easier to change broadband service

Google set to build backbone of its 1Gbps fibre network

Nicira reveals network virtualisation details

Post your comment

ZDNet UK Live

Latest in Networking

Ofcom to make it easier to change broadband service

Google set to build backbone of its 1Gbps fibre network

Nicira reveals network virtualisation details

Featured white papers

Latest jobs

Test Analyst - Business Intelligence /Data Warehousing

Test Analyst - Business Intelligence /Data Warehousing

Technical MI Manager - 50-60k - Leeds

Inside ZDNet UK

A tale of two distros: Ubuntu and Linux Mint

2012 Predictions: VCE FastPath, VI SAN Probe & Hadoop

BlackBerry Bold 9790

Case study: How cloud enables growth

Ten factors that make Ubuntu 11.10 a hit

Toshiba Portégé Z830-10P Review

BT's archive: Pictures from the vault

News & Analysis

Reviews

Blogs

Resources

About Us

Member Services

Special Features

Advertising Features

ZDNet UK / News and Analysis / Infrastructure / Networking

BT reassures City but scares ISPs

Daily Newsletters

Topics

Related stories

Post your comment

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

Latest in Networking

Featured white papers

Latest jobs

Inside ZDNet UK

Resources

About Us

Member Services

Special Features

Advertising Features