Gio Internet has announced a reduction in the price of its ADSL service from a competitive £21.23+vat per month to a new low of £15.31 per month (£17.99 incl. VAT). As far as we are aware, this is the lowest cost ADSL broadband service. The service is available to both residential and business customers on a three month minimum contract and is not tied to the purchase of any hardware although Gio sells these if required.
The cost of an individual ADSL connection is £14.75 per month. (This is the fee your ISP pays BT on your behalf). This leaves Gio £15.31-£14.75=56p per customer to cover internet connectivity, cost of the central pipe service, credit card merchant service charges and all other costs. As a term of reference the cost of a 155Mbps central pipe with 5000 users is £40,000 per year or 66.67p per user per month. Some ISPs think 5000 is over-optimistic.
Khaliq Abdul, Managing Director of Gio does however defend this low price stating that it has been "calculated very carefully" taking into account those charges to break even and Gio expects its range of business services (web design, hosting, etc.) will subsidise the cost of access. He also goes on to explain that their order process is streamlined and automated to minimise human intervention keeping costs very low.
We have also noticed that Gio's terms and conditions and acceptable use policy look very similar to those of Pipex [T&C / AUP] insofar as they involve using the clipboard copy/paste functions followed search & replace. Ironically, Gio's AUP "specifies the actions prohibited by the Public IP Exchange Limited" (for those of you who don't know.. that's what PIPEX stands for) and clause 4.4 of their ADSL terms state "All fees are subject to change from time to time in the event that the Carrier increases its fees to PIPEX".
David Rickards (MD, Pipex) isn't surprised: "Given [Gio's] broadband prices, it looks like they cannot afford their own lawyers! On a serious note, this is not something a professional company would do and we will be discussing this clear copyright breach with our lawyers."
A bit like leaving your business card at a bank during a robbery? :) [seb]
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