Broadband in UK overtakes dial-up after price reduction

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July 13: UK high-speed Internet connections surpassed the number of dial-up hookups for the first time, driven by falling prices and services such as online music downloads over the Web, the industry regulator said.

At the end of June, the country had 8.1 million broadband connections, reaching a third of British homes and businesses, Ofcom, the phone and media watchdog, said today in its annual market report. That’s more than double the number at the end of 2003. There are 7.5 million dial-up Internet users.

Competition in the industry, which Ofcom says is worth 45 billion pounds ($79 billion) a year, is forcing companies like BT Group Plc, the former phone monopoly, and cable operator NTL Inc. to cut prices and ramp up speeds. The popularity of digital music players such as the iPod, which plays tracks downloaded over the Web, has made a broadband connection more desirable at home.

“It’s one of the most competitive markets in the world,” BT chief executive Ben Verwaayen said in a Webcast speech at the company’s annual general meeting today. “People are changing the way they communicate over the Internet.” Verwaayen has said he’s signing up a new high-speed Internet user every 10 seconds.

Verwaayen, who plans to offer high-speed Internet access to more than 99 percent of U.K. homes by 2006, has often said broadband availability in the U.K. matches that of running water thanks to BT’s network rollout.