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AOL Broadband launches no minimum contract broadband
Wednesday 05 March 2008 16:37:48 by Andrew Ferguson

Broadband Wireless Flexi is the latest product in the AOL Broadband range. It is essentially the same as the existing Broadband Wireless product but has no minimum contract term, making it ideal for those who want a contract without any tie-ins.

The service is £14.99 a month if your exchange has been unbundled by AOL Broadband or £19.99 otherwise and carries a 10GB usage allowance with a maximum connection speed of 8Mbps. The product does carry a one-off connection fee of £49.99, but you do get a wireless modem/router and ADSL micro-filter in this start-up package.

“Some customers dislike long-term contracts for their internet service in the same way they resist lengthy mobile phone contracts, so we have listened to them. Our new offer means these people and others can now get a fast, modern, broadband service without needing a long-term contract or feeling tied in should their circumstances change or other offers become available.

We believe this offer will also help bring the benefits of broadband to hundreds of thousands of people. One in ten people with the internet, which is 2.3 million households, still use a slow, dial-up connection. This offer means they can switch to modern broadband internet without needing a long-term contract. The decision to get broadband just got even easier.”

Vishal Khakhar, Marketing Director of AOL Broadband

It certainly looks as if AOL Broadband is aiming to sign-up a good chunk of these reluctant converters to broadband. The set-up fee is refundable if you cancel in the first seven working days after the service was fully provisioned (the router will have to be returned too), after this period the £49.99 fee is not refundable.

While AOL Broadband is not the first provider to offer a product with no lengthy contract, it is the first of the providers with over a million customers to do so. It is possible that over the next few months we may see more providers rolling out products with shorter and cheaper to leave contracts in response to the recent news that Ofcom is looking into this area.

Comments

Posted by keith_thfc over 9 years ago
"The product does carry a one-off connection fee of £49.99"

I think this would put a lot of customers off - as its 3x the monthly charge - and more than you would normally pay.
Posted by pje1979 over 9 years ago
Surely there should be no connection fee if your migrating from another ISP?
Posted by wispy over 9 years ago
BT Wholesale charge a connection fee to all ISPs for every single connection. Whether the ISP passes on the charge to the consumer is down to them. Most of the big players can get away without doing that, but ultimately they can charge a connection fee if they wish.
Posted by OldSchoolSoldier over 9 years ago
I hope UKO switch to 1 month contracts :)
Posted by CARPETBURN over 9 years ago
quote"I hope UKO switch to 1 month contracts :)"

No chance they aint desperate to win back users they have lost unlike AOL
Posted by herdwick over 9 years ago
"While AOL Broadband is not the first provider to offer a product with no lengthy contract" actually about *half* the ISPs have one month contracts and have always done so.

It's a trade off between paying a connection fee that works out to be ~£4/month over 12 months or paying less and accepting the tie-in.
Posted by keith_thfc over 9 years ago
"The service is £14.99 a month if your exchange has been unbundled by AOL Broadband or £19.99 otherwise and carries a 10GB usage allowance with a maximum connection speed of 8Mbps"

How come the likes of be* can offer unlimited (and unshaped) for £14/month yet AOL are only offering 10GB on their LLU service?

Posted by herdwick over 9 years ago
Be were making a big loss, losing more per user per month than the user paid. It'll "Be" interesting to see their financial results for y/e 31/12/07.

AOL's access division was sold as it was losing money, CPW may be tightening the screws.
Posted by keith_thfc over 9 years ago
be* are basically a cost centre for O2 - so you can't really judge their results in isolation.

Seems strange how the likes of SKY/O2 can happily offer an unlimited LLU service for less than £15/month - but the likes of AOL can't.
Posted by gayboy-ds over 9 years ago
@ keith_thfc - It is a loss leader for Sky and O2. Sky makes a lot of money from TV. It is to entice you on to their TV network. Same applies to O2 with its mobile service.
Posted by herdwick over 9 years ago
"be* are basically a cost centre for O2 " - no they aren't, they are a UK Limited company. Both they and O2 are subsidiaries of Telefonica.

Sky are also losing a lot of money on broadband, presumably recovering it via council house TV.

So your question becomes "why are AOL not prepared to lose money like Be or Sky".
Posted by keith_thfc over 9 years ago
Herdwick - yes be* is a separate legal company but the reality is that its merely a cost centre for the huge O2 group, with a little revenue of its own.

Are be* really losing money on the £14/month service? The investment in capacity/staff/ has already been made so I would argue that this more than covers the incremental costs involved for 1 new customer.
Posted by c_j_ over 9 years ago
Don't Be* and O2 use the same LLU infrastructure? Keeping the two separate in marketing terms is likely to be to do with branding and keeping the two separate in legal/financial/accounting terms is likely to be to do with tax optimisation aka cooking the books.

AOL is merely a CPW subbrand. Are AOL customers affected by Phorm?
Posted by CARPETBURN over 9 years ago
Whether bethere, O2, Sky etc lose or make money diesnt really matter, unless someone can prove JUST THE LLU PART of AOL makes money or not. Bethere/O2 clearly are not that bad off or they wouldnt be unbundling more exchanges, Sky dont have to make money on its broadband as they make it on TV and AOL have so many links with other corporate entitys the broadband bit is also just a small drop of income. LLU services must be doing something right, they have gobbled into BT profits.
Posted by JDPower over 9 years ago
A sign of desperation I think. Many AOL customers have been having all manner of connection problems for about 3 weeks while they supposedly migrate over to CPW's systems. Whether it actually takes this long or they are using it as an excuse for the problems who knows, but I will soon be joining the legions of people leaving AOL if it continues much longer.
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