Price rises at Sky Broadband
While the price changes for Sky Broadband mentioned on SkyUser.co.uk are unofficial, the changes do have a ring of reality to them.
Sky Broadband, if you are in an area which Sky has its LLU network available, has been free for the Base (2GB allowance) product to those with a Sky TV subscription. As of March 2009 it seems this will increase to £5 a month unless you take Sky Talk which will allow it to remain free. The full list of changes is below:
- Base - currently free rising to £5 or free with Sky Talk
- Mid - currently £5 rising to £10 or £5 with Sky Talk
- Max - currently £10 rising to £15 or £10 with Sky Talk
- Connect - £17 (no price increase or requirement for Sky Talk and only available where Sky has no LLU presence.
By getting people to add Sky Talk to their current double play of broadband and satellite TV, Sky will benefit from the amount of chargeable calls people make each month, e.g. calls to mobiles. Additionally if people are in a triple play bundle, breaking out of the bundle becomes harder, though as Sky is only using the Wholesale Line Rental (WLR) and shared LLU products to supply the services, migration of phone or broadband to another provider is simpler than providers using a fully unbundled solution.
Existing Sky Broadband customers will be receiving a 10 month discount of £5/month so they won't see a price rise until 2010. Those signing up after 20th November 2008 will be informed of the future charges, and given the option to take Sky Talk.
Sky recently made a lot of PR noise over the removal of the fair use policy on its Max product, but as always there are cost implications to keeping a network running with enough capacity to avoid undue congestion. Add to this the pressure of increasing costs from a number of areas and it may not just be Sky raising prices, but simply that Sky are the first to twitch.
TalkTalk with its recently announced range of boosts is hoping to increase revenue from customers, and this move by Sky if correct seems to be another provider looking to increase the average revenue per user. Perhaps the broadband party is nearing a close and the reality of price rises will start to take effect, it is likely that these will be softened by wrapping them up as upgrades which tempt enough people to upgrade and avoid across the board price rises. Where providers have traffic management systems running they may squeeze their cheaper products just a little harder to give a subtle hint that if you pay more you will get more speed.