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Head boy calls telecom prefects to answer for their prices
Thursday 14 November 2013 11:42:57 by Andrew Ferguson

We have covered the various price rises in the broadband world, which largely have been around areas line voice line rental, and price rises for ancillary elements like caller ID as providers attempt to maintain low headline pricing. For those who adopted broadband in the first years it was available, they will remember the cost of dial-up access and the relief at getting a faster service that was actually cheaper, the first broadband connections cost around £40 to £50 per month in 1999/2000, oh and voice line rental was added to that.

So precisely what a summit hosted by the DCMS and with the Prime Minister involved is going to achieve is unclear, we can almost hear TalkTalk highlighting that they've introduced a £2.50 per month broadband option, which means a telephone line and broadband is cheaper now than when they launched in 2006. Sky will mention their free broadband service for those who take a TV service. BT will highlight the wide range of value adds to their packages. Virgin Media can point out that they offer broadband with no telephone line at all.

The fixed broadband world while we all moan about the line rental rises is exceptionally cheap for what you get and forcing lower prices could reduce customer service levels further or mean less investment in bandwidth so that peak times become congested. There are areas to be looked at, such as clarity of some offers and improving switching - but this already falls into the Ofcom remit and maybe the questions would be better asked as to why Ofcom is taking so long to revamp the broadband switching market.

Ofcom has acted recently to clarify one area and that was to make it clear that ANY price rise in the fixed term of a contract (often call minimum term in broadband offers) requires notification and the consumer given the option to switch elsewhere.

As ever the savvy telephone and broadband user is the one who reads the small print and uses a combination of switching provider to chase the best deal along with things like exploiting line rental saver options, re-contracting to get the latest deal from their current provider.

The other area is that of mobile contracts and roaming costs, the EU has already moved to end roaming costs by 2017, but they will be pressure to move ahead of that time. We are worried that the lose of roaming revenue will put pressure on contract prices. Moves to clarify the costs of subsidised phones may help some people, but enough shops sell the latest devices unlocked, that a few simple sums and you can work out which is best for you as an individual, i.e. pay for phone as part of a contract, or buy it up front with cash or suffer the interest from a credit card bill.

One radical idea that will not be discussed we are sure, is the idea of naked DSL, i.e. for DSL services that need a copper phone line that the cost of the copper provision is rolled directly into the broadband cost and no phone calls are possible across the telephone line. We would expect that it is possible for BT, TalkTalk and Sky to do something like this as a 'social' tariff at around the price of line rental saver plus broadband charge but without the 12 months payment in advance element.

Sky could pull something out of the bag unexpectedly, like free broadband (2GB allowance) for those who don't take TV and increase the usage allowance for those also taking a TV package to 10GB per month.


Posted by csimon over 3 years ago
The real innovation will be when companies stop engaging in anti-competitive practice and compete on value (price & quality) alone. Anti-competitive practice? Cheaper prices/better value only available via lock-ins for 1 year/18 months/2 years or multi-product packages.
Posted by jroadley over 3 years ago
Sign me up for naked DSL at a flat rate. If I want to speak to someone I have SKYPE, Facetime and thousands of minutes a month from my mobile.
Posted by csimon over 3 years ago
"We'll give you a discount if you promise not to go to a competitor for 2 years", or "We'll give you a discount on Product A if you promise not to buy Product B from a competitor.". The price changes depending on your transactions with a competitor-surely that's anti-competitive! There should be a list of products with individual prices and that's the price you pay and we'd be free to mix & match on price & facilities as much as we want.
Posted by andrew (Favicon staff member) over 3 years ago
If we push for short contracts as the end goal, then install/migration costs need to be zero at the wholesale level or else people will end up paying them upfront.
Posted by jumpmum over 3 years ago
There is the likelyhood the Naked DSL lines may have problems from high reistance faults, while you have the phone line as well the line current tends to clear these each time you make/receive a call ( only good use for telemarketing calls!)
Posted by mervl over 3 years ago
A government initiative a day keeps the critics at bay.
Posted by neilt0 over 3 years ago
"we can almost here TalkTalk highlighting that" <- "hear", not "here".
Posted by andrew (Favicon staff member) over 3 years ago
@neilt0 fixed
Posted by NetGuy over 3 years ago
I think I was lucky in using Primus for my phone line (given I hardly use the landline anyway) as it's only costing me 5.99 (and that's charged monthly not on some annual deal).

Since the setup costs aren't "insignificant", it doesn't seem that strange to me to have a contract length of 12+ months, when some of the costs are being absorbed, and the company may only "break even" 10+ months into the contract (probably more than 10 months in the case of FTTC).
Posted by jrawle over 3 years ago
I don't think the current broadband market is all that bad. The only thing I would change would be to outlaw price rises during a fixed term contract (for mobile contracts too). Fixed term should work both ways. The customer is committed for the duration, but the provider should have to honour the price too. Saying customers can have the right to leave is not good enough, as the inconvenience will stop many of them doing so. Price rises should be outlawed completely. That could mean shorter contracts become the norm.
Posted by zhango over 3 years ago
BT quality is suffering already - this is the 2nd time this year with phone dead. I've just had a text "Sorry about fault we aim to fix it by end of 20/11/2013"
I'm pleased they said it would be this year!
Posted by gc01 over 3 years ago
Telephony services are more profitable for the service provider than broadband. I doubt if any will offer naked DSL.
Posted by chrysalis over 3 years ago
Umm if I had choice between control over energy bills or broabdand, I choose the former, the latter is good value for money the former is out of control. I spend £60 a month on electric just for myself in a small flat, ridicolous. Also I suspect this will do nothing for the long contracts, high line rentals, call charges etc.
Posted by dsf58 over 3 years ago
Energy and Broadband both suffer from the potential for tariff confusion rendering comparison difficult. But that suits the mega-suppliers so I suspect nothing will change.

It is difficult to shop on price, so I stick with a small supplier who has a one month contract length. Perhaps I can squeeze a greater usage allowance out of them?

I would like to see TV adverts better controlled:
E.g. "£2.50 per month Unlimited usage! (Small print: for first 6 months, thereafter £20 per month, minimum contract 18 months, line rental extra, fair usage applies, set-up cost applies)"
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