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Central Point breaks current 2 Mbps price barrier
Friday 23 January 2004 07:36:00 by Sebastien Lahtinen

Central Point, a company that has been relatively unheard of in the broadband industry thus far, has launched a 2 Mbps service at a price that we believe breaks the current lowest price point for this type of service.

The company is offering a 1 Mbps connection at £26.99 and a 2 Mbps service at £35.49 inclusive of VAT. The service includes a static IP address and the minimum contract is only three months. A one-off £29.99 setup charge is also applicable. Central Point make an issue of stating they have no download limits and do not restrict p2p applications. We have often found ISPs to be reluctant to discuss who provides their connection to BT when using DataStream and Central Point's website is a welcome exception to this showing a great deal of openness about their suppliers.

This particular offer is quite well designed because it takes the best advantage of resources. ISPs do not pay for IP address space per se, so offering a fixed rather than a dynamic IP for broadband is not in itself a particular cost. Similarly, the cost of BT's DataStream service at 2Mbps is no different on a wholesale level to a 512 Kbps one, although the virtual path/backhaul costs are higher to support this. However with a large number of users achieving good contention ratios, these allow larger DataStream providers to offer faster services at drastically lower prices. Not surprising then, BT is making sure it's IPStream service is being made more flexible.

One issue that users taking up lower cost 2 Mbps services will have to get used to is more variable speeds. Most of the cost reductions which are allowing providers to bring the cost down are closely related to the end user local loop costs. This means that they can offer faster speeds to individual users, but overall their utilisation rates can't rise four-fold. This will mean users will suffer more contention than before, but with lower prices, this should not be considered a bad option. After all, why restrict someone to 512kbps if there is capacity to offer faster services which isn't being used.. the Bulldog principle with PrimeTime.

More information on Central Point's service can be found on their website:


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