BTopenworld, the internet service provider (ISP) owned by British Telecom, is to cut the retail price of high-speed broadband internet access by 25%.

The price of subscriptions to BTopenworld's broadband internet package will fall from �39.99 to just �29.99 a month from 1 April, the company said in a statement.

The move is expected to boost competition between ISPs and encourage more consumers to sign up to broadband subscription packages.

The UK has one of the lowest broadband take-up rates in Europe, raising fears that British consumers and businesses may find themselves at a competitive disadvantage in future.

Wholesale cuts

BTopenworld's reduced retail tariffs follow sweeping cuts in the wholesale broadband prices it offers to other ISPs, announced on Tuesday.

"It will now be even cheaper and easier to get connected to high speed internet, and our existing customers will see a substantial fall in their monthly rental," said BTopenworld chief executive Alison Ritchie.

BTopenworld currently has about 100,000 broadband subscribers, and sells wholesale broadband access to about 200 smaller ISPs.

The price cut brings BTopenworld's broadband package into line with the subscription fee announced on Tuesday by its biggest rival Freeserve, owned by France's Wanadoo.

Price competition

Several smaller ISPs are offering even cheaper rates.

Eclipse plans to offer broadband connections for �26.73 a month, while Pipex, one of the UK's first commercial ISPs, on Tuesday said it will cut its subscription fee to just �23.44 a month. Both prices include VAT.

The new broadband charges compare with a fee of between �10 and �15 for standard dial-up connections.

British consumers' reluctance to sign up to high-speed internet services has been blamed partly on the relatively high cost of broadband subscription in the UK.

Pricey Britain

Even after the price cuts have taken effect, the average cost of broadband connections in the UK will remain higher than in mainland Europe, where most ISPs charge the equivalent of �20 a month or less.

Broadband users can access the internet without dialling up their ISP, and can make or receive telephone calls while online. They can also download content from the internet up to ten times faster than on a dial-up connection.

Broadband internet access is also offered at competitive rates by cable television companies such as NTL and Telewest, but their cable networks do not extend nationwide.