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How cheap can they go?
Wednesday 31 July 2002 13:20:00 by Andrew Ferguson

ET Global Solutions has released ADSL pricing that is truly rock bottom:
   ex VAT   inc VAT 
Home 50:1 Service £16.13 £18.95
Office 20:1 Service £46.76 £54.93
Activation £51.06 £59.99

These prices are about as close as you can get to selling at a loss, since the wholesale charge is £14.75+VAT per month for a 50:1 connection and £40+VAT for the 20:1 service. There are other charges to go on top of this such as staff wages, office space and BT Central related costs. For example, a 155Mbps BT Central connection (the link between the BT network and the ISP) costs £40,000 per year. If the ISP has 5,000 customers on this link, the per-user cost works out to be around 66 pence. This would leave ET Global with just 72 pence per month for everything else. Perhaps they hope to boost profit on items such as static IP options, hardware, micro-filters etc.

Is this price cut going too far? There are plenty of examples of what can happen when service providers cut too many corners - long support queue times, to name just one.

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