The Times’ Tempus writes:

BT’s Wider View of Broadband Should Secure Its Future

By Robert Cole

IT USED to be called the World Wide Wait, but broadband has made surfing the internet a pleasure. It costs a bit more than an old-fashioned dial-up connection but people clearly think it is worth paying more to end the frustration of net delays. More than 5,000 Britons are signing up every day and most rely on BT�s network.

For BT, meanwhile, broadband is crucial. These days the typical BT customer spends a little over �22 a month on his or her home phone. If BT can sell a customer broadband too � at a cost of between �20 and �25 a month � then the company can double its consumer revenues, which are a third of its business.

However, there are threats. The first worry for BT is whether it can hold on to the custom. Since the company has been competing with, and beating, cable operators for the best part of a decade, there is ground for confidence here. But there is the newer threat in the shape of firms that rent BT lines and provide their own service. Arrivistes cut BT�s take in half.

These operators, such as Centrica�s One.Tel and Carphone Warehouse�s TalkTalk, are biting into BT�s traditional revenues. They fell 6 per cent in the fourth quarter of last year. After a long period of stability, BT is also losing share of the residential voice market. In the past 12 months it shrank from 73 to 69 per cent.

That is unsettling, but there is more to fray nerves. Earlier this month Ofcom, the regulator, forced BT to open up access to the last mile of its network to its competitors. To make anything of the change, BT�s rivals will have to make heavy capital investment, but if they do they could get hold of a line by paying as little as �1 a month to BT. Worse still, it is gradually becoming possible to operate a full telecoms service over a broadband connection, meaning that consumers can bin their traditional phone connection entirely.

If BT can dominate the provision of broadband telecoms services to UK consumers, its future should be assured. Helped by revenues from its burgeoning computer services activities, it has the capacity to replace waning old income streams with vibrant new ones. BT is making a better fist of the challenge than many counterparts on the Continent.