Ref: 34/02
Date: 12 June 2002

Broadband prices for consumers in the UK are as cheap as in France, Germany or the USA, according to new research published today by Oftel.

Following recent wholesale price cuts, the UK is now cheaper than France and Germany for consumer DSL, with packages available for as little as £20 a month.

And for some business broadband services, the UK is the cheapest country surveyed.

As consumers get a better deal, take up continues to rise. Prices for DSL have fallen by 39% since the beginning of the year - and user numbers have increased by 50%.

The UK now has over 600 000 broadband connections and Oftel estimates that there are over 20 000 new connections every week.

The UK has a more competitive market for DSL than either France or Germany, with cheaper wholesale prices than France and more competition from service providers

In addition, there is more competition from cable operators in the UK than in France or Germany.

David Edmonds, Director General of Telecommunications, said today:

"Oftel's latest benchmarking research shows that the UK is moving up the broadband league.

"The UK is as cheap or cheaper for consumer broadband than all countries surveyed except Sweden.

"Taking DSL on its own, the UK is now cheaper than either France or Germany, as prices to consumers have fallen in line with reductions to the wholesale price.

"Oftel's research shows that the UK has a more competitive broadband market than either France or Germany, with consumers taking services from a range of networks and service providers.

"End to end wholesale DSL is more expensive in France than in the UK, and not available at all in Germany. Oftel estimates that 50 per cent of connections are provided by service providers other than BT.

"In addition, there is strong broadband competition from the cable operators in the UK.

"Oftel is committed to ensuring that service providers can compete fairly with BT at the retail level and to healthy competition at the wholesale level."

Oftel's research showed that UK consumers continue to get a good deal on dial-up Internet access, particularly for unmetered services where UK prices are cheaper than all other countries in the study by at least 9%.

Oftel has also published updated reports on the fixed and mobile markets.

The fixed market has seen little change over the last year, with residential prices lower than average and business services slightly higher than average.

UK mobile customers have moved from paying prices slightly below the average of the benchmarked countries to paying slightly more. This is mainly due to the withdrawal of some lower cost packages by UK mobile operators.

Notes to editors
1 International benchmarking study of Internet access (dial-up and broadband), International benchmarking study of mobile services and International benchmarking study of fixed line services are published on Oftel's website at www.oftel.gov.uk/publications/research. Hard copies are available to the media from Oftel's Press Office on 020 7634 8991 and to the public from Oftel's Research and Information Unit on 020 7634 8761.

2 The reports look at: Internet access via dial-up PSTN, DSL and cable modem; mobile services; and fixed line services. The countries considered in the studies were France, Germany, Italy (mobile only) Sweden, the UK and the US (not included for mobile). The analysis and drafting of the reports was carried out by Oftel. The models developed by Oftel used to generate the results were audited by an independent consultant, Analysys Ltd, who confirm that the models are logically sound and that correct tariff data has been used. The tariff data used in the reports have been collected by consultants Total Romtec and Tarifica. The results are based on a snapshot of prices as at February 2002 except for UK broadband results which have been revised to reflect prices as at April 2002.

3. The survey was conducted to benchmark UK prices against those of a number of other countries and US states and should not be seen as recommended 'best buys'. When making a purchase decision, consumers will want to have the latest pricing information, as well as taking into account other factors such as service features, personal usage patterns, terms and conditions and indeed any other factors that they feel are relevant to their needs.