Broadband allows faster connections

The move follows the group's decision earlier this week to cut the price of fixed line national phone calls.

BT, which operates a national broadband network through its telephone lines, said it would cut its charges to groups such as AOL or Freeserve who offer their service directly to customers through BT lines.

The price cuts will be effective from 1 May and see the monthly charge that service providers pay BT for standard broadband connections fall from �14.75 to �13 per month.

The move could boost profits of Internet Service Providers, although in this highly competitive market it is likely that consumers will benefit as well.

Extending its reach

BT has also decided to cut the price of its service for small businesses by more than 50%, from �40 a month to �18.

The group added that it was on course to meet its target of one million broadband customers by the summer.

Broadband connections can make internet access up to 40 times faster by providing a permanent link to the service.

BT now wants to maximise its reach, with a goal of serving 90% of UK households and businesses from its current level of 67%.

BT said it would do this by updating its local exchanges.

We are asking the government to use their need for broadband to help normal people get it Ben Verwaayen, BT chief executive BT thinks the government should do more

"Central to the setting of the new triggers is a technological development that enables exchanges to be linked together so that the costs of connecting them to the core BT network are reduced," said the group in a statement.

But it is also calling the government to help the push for wider broadband access.

Getting cheaper

The group's broadband reductions have come under fire from the telecoms group Thus, who want the regulator Oftel to investigate the new pricing strategy.

"It is important to ensure that those incentives are sustainable and do not compromise the development of competitive markets," said Thus chief operating officer Phil Male.

"BT has failed to pass on similar price advantages to its Datastream service - a service which allows other service providers to use their own networks, to differentiate and add value to the standard and inflexible services provided by BT Wholesale," he added.

BT's decision to cut its broadband prices comes a day after it revealed plans to reduce call charges on its most popular household rate, BT Together.

These reductions, effective from June, will mean the end of charging per minute for all evening and weekend calls and make distance irrelevant, offering just one rate for UK and local calls.