Hey guys,

Im on a 10mb deal from Virgin Media (rated at 9.5mb by broadbandspeedtest) which should roughly equate to download speeds of 1.2mb/s.

When I download games off of Steam, I get the 1.2mb/s for abit the first half hour to an hour, then it will suddenly drop to around 250kb/s and hover around that area for the remainder of the download.

Has anyone got any suggestions as to why?

It can be just about anything. That 10Mb may be for burst mode which will use full throttle for the first few minutes then slow down. The steam servers may be congested. Any router or hardware your data has to travel through on it's way from seam servers to your house may be congested or just not working right.

Basically, your fastest speed is determined by the slowest link in the chain. The internet doesn't create direct connections between two computers. there are may routers and networks it needs to go through to reach it's destination.
Maybe it's the way steam servers are set up to give equal time/speed to clients, sort of round robin. Mine will vary anywhere from ~1.8mb/s to ~250kb/s also.

Also, be sure to check your steam settings and set the bandwidth control appropriately. You can also change the steam servers location. I think mine is set to new york since that is closest to PA.