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Broadband surge - good news for advertising agencies
Monday 24 July 2006 11:41:00 by Andrew Ferguson

Broadband in the UK has gone through several stages, but it took off roughly three years ago as it started to become the accepted Internet connection rather than a dial-up connection. Now we have multiple companies chasing for our hard earned cash, and do not be fooled even if the broadband is free, you will be paying for it one way or another. Currently you can get broadband thrown in, if you take a calls/line bundle from TalkTalk, Satellite TV from Sky or mobile phone from Orange, but invariably it's the case that the parts of the UK where the free deals are actually available is limited.

As some papers like The Times over the weekend have pointed out, the growing number of LLU providers are actually looking to enable the same 1000 or so exchanges, so the race will be who gets their kit installed and up and running in a stable manner. For those outside the areas of LLU services, the free or bundle advertising is perhaps not so attractive. For example Broadband via Sky is £17/month if not using LLU and Carphone Warehouse charge an extra £10. Currently Orange is the one LLU provider with a bundle offering a single price across the country.

The Times also warns about the free/low cost services and delivery. One user who contacted them applied to TalkTalk three months ago and has started the 18 month contract for the telephone service, but they have yet to receive the free broadband component. Oddly the customer has an existing ADSL service, that they are paying for, but it is with One.Tel who are owned by Carphone Warehouse. Asking posters on our forums, we have not as yet seen any sign of people on the TalkTalk LLU service, or people with a faster than 2 Mbps service. Whether Sky will suffer the same fate is hard to judge, but it has hit the ground with 28% of households already connected to an exchange that have UK Online/Easynet LLU kit installed and working, whereas TalkTalk is building its unbundled network from scratch.

The two main incumbents BT and NTL are the ones you would expect to be running scared. To some extent BT has it easier as even with a LLU service, they still will make some money from the line, whereas a customer lost to NTL will be a total revenue loss. Traditionally in the ADSL market, you could change providers and not worry about the telephone side of things, but with more and more bundles it is worth considering what you are doing, putting all the eggs in one basket makes changing at a later date more difficult. A thought for the day: There are some very good deals in the UK now, but there is the risk that once providers burn through their fighting funds, that prices may creep back up. This is slightly easier to achieve with telephone bundles with increases in call charges, minimum charges, etc.

The amount of publicity at the moment combined with the current levels of demand for broadband mean that to some extent there is room in the market for the new entrants, but in a year's time we may see even more competition as the number of sign-ups start to level out. Who knows what the marketing people will do to attract customers once the market becomes more cut throat, and how long will it be until you are paid to take out a broadband connection?


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