£10 broadband bill set to spark price war

A massive price war over the cost of broadband internet access was set to break out today.

UK Online has become the first company to drop its monthly charge to under £10, undercutting rivals who include BT and AOL.

Experts say the move will lead to further price cuts within days as they companies compete for the huge market in high speed internet access.

Recent figures show that over five million people now have the highspeed connections.

BT's own broadband business has a 35 per cent share of the market, with the rest of the customers shared between the 200 companies that re-sell BT lines.

"This is going to spark a big price war among providers, in what is already a highly competitive area," said Dylan Armbrust, editor of Computer Active magazine. "These days a broadband connection is the same price as a dialup one, so a lot more people are switching over, and ?10 is a really important price point for consumers," he added.

UK Online's competitors are expected to cut their prices within days.

"Price is really a key determinator for people, so we are going to see a lot of activity in the coming weeks with companiescutting prices," said Mr Armbrust. "I think for consumers the key advice is not to spend any more on a broadband connection than you currently pay for a dial-up one.

"If you download a lot of music and video it's also worth paying a bit extra for higher speed services such as one or two MB connections - they make a huge difference."

Today's price cuts have been sparked by BT reducing the cost of getting access to its exchanges, allowing rivals to offer cheaper services.