Half of all UK homes now have Internet access, according to industry regulator Oftel.

Research published yesterday by the regulator claims that 12.5 million UK households are online now, with 750,000 households signing-up over the last three months. UK dial-up prices are lower than other European countries.

Broadband adoption continues to ramp up, the regulator said, announcing that around one million customers are likely to upgrade to broadband over the next 12 months.

Oftel's director general of telecommunications David Edmonds said: "Growth in Internet access, coupled with some of the lowest prices in Europe, is excellent news. Oftel's policy of creating competitive markets for Internet access continues to drive the growth in Internet access.

"Prices in the UK are cheaper for dial-up than all other countries covered in Oftel's benchmarking research, so it is not surprising that half of UK homes are now connected to the Internet.

"Our research shows that 90 per cent of Internet customers are happy with their overall service. We look forward to these trends continuing."