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Starting from next Thursday (17th February), BT will begin to increase the speeds of most new and existing consumer customers to up to 2 Mb. Those on the capped BT Broadband Basic service costing £17.99 will have their speed increased from 512kKbit up to 1 Mbit.

Around 5 per cent of customers who are too far away from the exchange will not be upgraded. Furthermore, according to BT, there will also be a small proportion of customers who will only be upgraded to between 512Kbit and 2Mbit for similar reasons.

BT says that the actual dates are dependent on when BT Wholesale upgrades the exchanges but says that 95 per cent of its customers should see

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their speed increase by July.

Earlier this week AOL announced a similar free upgrade for its customers. However, AOL`s equivalent Gold service, the same as BT Retail's standard broadband package at £24.99 is only upgraded to 1Mbit. Other ISPs are now expected to follow suit.

Business customers will see their upgrades from 1 April. Customers of the Premium business product will get a service level guarantees which promises to fix any problems within eight hours.

Not entirely co-incidentally, BT announced its quarterly results that show it had 4.1 million users of broadband at the end of last year. It also announced that it made a record 813,000 DSL connections in the quarter.

Nevertheless, the move to quadruple the connection speeds for free has been prompted by BT Retail's worries that it only got 26 per cent of new customers in the quarter. It still retains the number one position with a market share of 36 per cent of the broadband market.

The company also hopes that the upgrade will open up a new raft of services such as video telephony, online gaming and time shifted TV over broadband. The company is not saying what, but expects to make further announcements over the coming month.