Broadband to cost just £10 per month

By 2011, increased competition will force ISP to drop prices

Prices of broadband connections in the UK are set to plummet down to as little as £10 in four years' time, a new study predicts. The price drop will be driven by increased competition between ISPs, according to the Centre for Telecoms Research (CTR).

Its UK Internet Services Market 2002-2011 report predicts that consumers will continue to switch to services offering faster download speeds, which are typically more expensive. But ISPs will charge less and less for bundled broadband, phone and TV packages, where the customer pays a lower rate to buy several products from the same supplier. This will drive down broadband prices - both as standalone services and as bundled deals.

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"Competition between ISPs is likely to intensify over the next five years, and this will result in many operators supplying high-speed broadband as a loss leader or as part of a bundled package in hope of cross-selling other services to the customer," said Raj Modi, research director at CTR.

The report also suggested that around 85 per cent of UK households with a PC will use broadband by 2011.