BT gambles on move into home PCs

The telecoms giant BT yesterday upped the ante in its battle to win more broadband customers by starting to sell personal computers with high-speed internet access already pre-loaded.

The new service, called BT Home Computing, will see BT selling Toshiba and Hewlett-Packard machines over the internet and telephone as well as related technology services.

Consumers will be able to choose from eight different PC packages, costing from £35.99 a month to £68.99 a month over a three-year period. The service includes installation by a BT engineer as well as ongoing technical support and maintenance.

The PC launch came as the company confirmed it had also offloaded 20.8 million shares in the satellite broadcaster BSkyB for about £120m. Shares in BT closed down 5.25p at 195p.

Its move into home computing, which BT had previously flagged in April, is part of the group's commitment to putting broadband "at the heart" of the operation.

To that end, BT also announced it had appointed Alison Ritchie, who is currently chief executive of its BT Openworld unit, as its first chief broadband officer. Ms Ritchie will remain at the helm of BT Openworld but will hand over the day-to-day running of the division to John Butler, currently director of services and strategy, for regulatory reasons.

BT predicts it will have about £681m of broadband-related revenues a year by 2004-05 and expects the new BT Home Computing service to make up about £150m of that figure.

"With each PC coming broadband-ready as standard, the move into this market represents a further step in BT's strategy to encourage broadband take-up in the home," the company said.

Each of BT's eight home computing packages, which range from a basic PC to a high performance laptop, come installed with Microsoft XP software as well as virus protection and security technology.

"Choosing and using a home computer shouldn't be the stressful experience it clearly is," Angus Porter, managing director of BT Retail's consumer division, said referring to research carried out by Mori which found more than 10.6 million people were unhappy with their home PC.

"By teaming up with the very best organisations in computing, we are able to enter a completely new market, building on our commitment to build Broadband Britain, and fill an important gap in the home PC market," he said.

BT is already spending £33m on a broadband advertising campaign. The company is hoping to have 1 million broadband users by the middle of next year and aims to have increased that to 2 million by 2004 and to 5 million subscribers by 2006.

Last week, BT said it had about 451,000 broadband users as at the beginning of November with orders running at about 16,000 a week ­ putting it on track to hit the first of those targets. In her new role, Ms Ritchie will be in charge of broadband developments across BT for residential and business customers.

Separately, the internet service provider Freeserve said the Competition Commission Appeal Tribunal had ruled in its favour and would investigate its complaint "about the conduct of BT in relation to its marketing of residential broadband internet access".

Freeserve, which saw its complaint dismissed by the telecoms watchdog Oftel earlier this year, said the judgement underlined a commitment to ensure competition in the broadband market. "Competition is vital if the UK is to achieve its ambitious programme for mass consumer take-up of broadband internet," David Melville, Freeserve General Counsel, said.