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ISPs run to low end market..
Monday 01 March 2004 16:31:00 by Sebastien Lahtinen

Many will argue that this is the wrong way to go when we see slower "broadband" connections being launched, but increasingly more and more ISPs are joining the not-quite-broadband "broadband" bandwagon with 256kbps services that won't even stream current "broadband quality" video (which itself could be far improved).

This morning, TheRegister reported on two product launches: BT Broadband introduced a new 'capped use' service at £19.99 (incl. VAT, when paying by Direct Debit) a month. The service includes a 1GB traffic allowance and it is expected BTB will introduce a charging mechanism for further use. The setup fee is £80 which includes a modem on a twelve month contract.

BT Broadband Basic as the new package is called, is targeted at current dial-up users who do not see the need for broadband at current prices:

"The Basic package provides a simple to use, low-cost entry level service but with the equivalent speed of our other broadband products - unlike some of our competitors who offer so-called low cost broadband packages which, at best, run at half the speed of BT's basic broadband service.

Getting not so broad broadband from other providers presents major limitations on what you can do on the internet, with much more time spent waiting for things to download, like web pages, music tracks and video clips."

Duncan Ingram (Managing Director), BT Openworld

So in this respect, we should congratulate BT in that they are moving towards a model that allows users to pay for what they actually need to use, but still have the availability of a "true" broadband connection, unlike a certain other companies..

TheRegister quoted Ingram as saying that 1GB is "plenty of capacity for half of broadband users" which perhaps illustrates the problem with broadband adoption as it stands.

Also out today, Telewest has announced a 256kbps "broadband" service at £17.99 per month (incl. VAT) with guidance that users should not exceed 750 MB of traffic per day and the company will endeavour to move heavier users to another package. This seems to be the other extreme of slower speeds but offering far more actual usage at around the same price bracket. The setup fee (waived for the first 5,000 who pre-register [see TheRegister for link]) is £67.99.

To end the day, PlusNet has decided to take advantage of the publicity generated by BT in introducing this service and made an even better offer. It has already been offering its entry-level 512kbps HomeSurf service for a long time and now includes a free USB modem in the package to tempt users to its service which costs £18.99 (incl. VAT), right in between the BT Broadband Basic and Telewest services

"PlusNet welcomes today's announcement by BT, which is indicative of the usual suspects (Freeserve, AOL, BT) starting to recognise the pricing realities needed to drive full broadband take up. However, it is surprising that BT are claiming to take the lead on a sub-£20 product, especially when everyone is aware of each others' product offerings - and we have been offering Home Surf for almost two years.

It's encouraging to see someone else joining us in selling a true broadband product at under £20 and not just promoting their low speed, low priced broadband products, the emphasis on which only serves to confuse and take the whole market in the wrong direction"

Marco Potesta (Marketing Director), PlusNet

Of course, we should not forget PlusNet's "dslConnect services which start from 150 Kbps (£15.99/mo) although admittedly it is making the speed differences more clear than others on its website. But, overall, PlusNet's price (including its current offer) is both £1 cheaper each month, it costs £20 less to install, includes local rate support and best of all, and they won't charge you if you go over 1 GB a month.

It is not unexpected that usage-based charging is coming in at a steady rate, but some will see 1 GB per month as quite restrictive, making it difficult to take advantage of broadband. We believe the key to usage based charging is such that it separates "heavy" users from "light" users rather than making them worry over every single download they make and the way to do that is to bring the "per GB" costs right down with a generous inclusive allowance. It doesn't necessarily matter if ISP profit comes from light users as long as it's not at the cost of subsidising heavy users. However, going on what BT told TheRegister about actual utilisation, it seems that broadband content is lacking. [seb]

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