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Story: Boosting broadband competition is vital, says IoD
Posted by: Dave Hall (Sunday 10 October 2004, 4:51 PM)
It's a case of yet more media hype in an attempt to get BT to cut even narrower margins.
Consider the fact that BT Wholesale can actually charge as little as £9 per month per customer, with a maximum of approximately £15 - that's for the basic service alone.
When you consider the mark-up certain big-name ISPs generate on this, they can't really argue with the wholesale price (some make almost an extra £8.50 per customer per month). If you add this up over the year and take into account all the other connection costs ISP face from BT Wholesale, they still make a profit of £90 per customer per year.
It's a case of wanting something for nothing. Further price cuts at the wholesale end will do nothing more to stimulate competition - of course ISPs want the price to decrease; they can decrease their own price but still make the same margin or increase.
It's disgusting. This is not a profitable industry, so even taking into account the other costs an ISP business faces, they shouldn't expect to make huge amounts of money from what they do. That's why additional content can prove such a lure to some ISPs, who use it to further artificially inflate prices.
BT Wholesale is not the problem.
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