Almost one in two UK homes have access to the internet, according to the latest figures from telecoms regulator Oftel.

The watchdog says 45 per cent or 11 million homes are now online compared with 39 per cent three months ago and 30 per cent a year ago.

The research revealed most people surf the web using computers connected to the internet via telephone lines rather than by digital television or mobile telephones.

It ignored broadband access using digital subscriber lines (DSL), cable modems or unbundled local loops - the part of the telephone network that links individual houses to local exchanges - which would most probably reduce the proportion.

The figures were released as Oftel outlined its plans to secure the future of unmetered internet access.

One of the most significant proposals is for BT to offer payment terms for unmetered internet access, which is used by more than four million UK homes, that are the same as those for metered access.

Currently an operator has to pay BT in advance for unmetered capacity while metered capacity is paid for in arrears.

Other issues covered in the consultation document include the circumstances in which BT must increase network capacity to handle internet traffic and BT's ability to charge for the routing of internet calls within its exchanges.

Director general of telecommunications David Edmonds said: "Oftel's review of the internet access market shows consumers have access to a wide range of services and prices for using the internet that are among the best in the world.

"Dial-up narrowband internet access is how most consumers start using it, so it is important we have a thriving and competitive internet access market.

"Dial-up internet access also acts as a stepping stone to faster broadband services as people use the internet to study, shop and for entertainment.

"Action by Oftel, notably the requirement on BT to offer wholesale unmetered internet access, has helped to put this flourishing market in place."

Mr Edmonds said the network charge control offered robust protection to consumers.

Easier payment terms have been proposed to help smaller telecoms companies continue offering unmetered internet access.

Although the low cost of un-metered access packages enables internet users to spend more time online, many analysts fear as smaller businesses run out of cash or are bought by bigger companies, prices may rise.

Karl Robinson, chief executive of Brighton-based Mistral Internet, said the market was more difficult to predict than the figures suggested.

He said: "A lot of internet service providers are falling by the wayside, which means others, like us, are doing better not necess-arily because of a growing market but because of reduced competition."

The growth in home connections contrasts markedly with other research suggesting users are not ready to abandon High Street banks for internet banking.

A report by BT Finance Industry Solutions and The Henley Centre showed the growth of online banking was slowing and, of those who used the internet, only two per cent had stopped using their branch. While more than a third of the UK used the web to find financial information last year, the number of people banking online levelled off in the past few months after initial sharp rises.

Between May and August, the number of online bankers in the UK dropped 100,000 to 5.6 million.

The poor demand for online banking contrasted with a boom in online retailing.

Internet research firm Jupiter MMXI said almost 33 million Europeans used the internet to make Christmas shopping easier.

Nine million British internet users accessed online retail sites from home in December, second only to Germany.

A year-on-year comparison showed most countries experiencing an increase of more than 40 per cent in the number of unique visitors to retail web sites.

www.oftel.gov.uk
www.bt.com
www.mistral.co.uk
www.henleycentre.com
www.jupitermmxi.com