British ADSL price war

kaspaas

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Aug 6, 2003
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Ok, it is for the low end - but the low end is out of reach for us because of Telkom's "line charges"

Shows how little the infrastructure cost of ADSL actually is - I don't think BT would supply ADSL connections at a loss.

Regards


<b>Low cost broadband battle hots up</b> http://news.bbc.co.uk/2/hi/technology/3521539.stm

BT has launched a no frills broadband service to try to get more people to sign up for a fast internet connection.
The telecoms giant is hoping the £19.99 service will tempt people who already have dial-up to switch to broadband.

Cable company Telewest has also announced a new low-cost broadband service for £17.99 a month.

"Having a product that is affordable will tempt a lot of people to consider broadband," said analyst Ian Fogg of Jupiter Research.


Surfing limits

BT says the 512Kbps speed of its Asymmetric Digital Subscriber Line service is much faster than other cut-price offerings.

The BT Broadband Basic service imposes a 1GB limit on how much customers can download per month.

The 1GB cap is the equivalent of 20,000 web pages, 200 MP3 music tracks or 100 large software programs.

"This is plenty for half of all broadband users," said Duncan Ingram, Managing Director of BT Openworld.

"It is pretty generous and makes quite a significant difference to our economies," he told BBC News Online.

BT also says that the service is only suitable to be used by a single PC as it does not support home networking.

Price wars

BT currently has around two million broadband customers but has a target of five million by 2006.

There are a few very low bandwidth offerings, but we are not convinced that is the fairest or best deal for the customer

Duncan Ingram, BT Openworld
"We are confident it will play a big impact," said Mr Ingram.

Most people can get a standard broadband connection of 512Kbps for about £30 a month, although there are higher speed products available at a price.

Other internet providers such as Tiscali and NTL offer different broadband packages at a range of prices.

"There are a few very low bandwidth offerings," said Mr Ingram, "but we are not convinced that is the fairest or best deal for the customer."

BT Broadband Basic is £19.99 for direct debit customers and £20.99 for all others. There is also a start-up fee of £80, which includes the cost of a modem.

"We believe it is a sustainable price point," said Mr Ingram. "It is good value now and will be good value in two years' time."

Pound-saver

One of BT's competitors, Telewest, is also looking to lure customers by offering bargain broadband.

Its 256Kbps service costs only £2 more than dial-up services from BT Yahoo and AOL, but offers surfing speeds up to five times faster.

"We're expecting demand from people who have previously considered broadband a big leap from dial-up and now getting on to the first rung of the broadband ladder will become a no-brainer," said Chad Raube, director of internet services at Telewest Broadband.

Smaller internet providers such as PlusNet have already been offering a 512Kbps for around £20 some time.

"It's encouraging to see someone else joining us in selling a true broadband product at under £20 and not just promoting their low speed, low priced broadband products, the emphasis on which only serves to confuse and take the whole market in the wrong direction," said Marco Potesta, marketing director at PlusNet.

Analysts believe that the new entry-level products from BT and Telewest could sway people who have been wavering about signing up to broadband because of the cost.

"People are very aware of price," said Mr Fogg. "There is no reason not to pay a tiny bit extra for a vastly superior service."




South Africa needs World Class Broadband at World Competitive Prices.
 

onionpeel

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Sep 22, 2003
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515
The concept of a true price war does not and will not exist between network operators in this country for some years to come.
The industry is not deregulated enough. Interconnect charges (regulated by ICASA) between operators have a knock on effect which impact on the retail tariff structure of each operator (also regulated by ICASA).
Like Cell C is to Vodacom, the SNO will piggy back on Telkom for some time to come, and hence the fixed and variable call costs for the SNO will be much higher than Telkom. This effectively puts a delay on true competitive pricing as we see elsewhere in the world.

It will come, but this kind of thing takes many years... good luck to those who expect it soon.
 

caroper

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Aug 5, 2003
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The BT Broadband Basic service imposes a 1GB limit on how much customers can download per month.

The 1GB cap is the equivalent of 20,000 web pages, 200 MP3 music tracks or 100 large software programs.

"This is plenty for half of all broadband users," said Duncan Ingram, Managing Director of BT Openworld.

"It is pretty generous and makes quite a significant difference to our economies," he told BBC News Online.

BT also says that the service is only suitable to be used by a single PC as it does not support home networking.

Now we know who Steve Whites mentor is, we just need to find his financial analyst.[;)]

Cheers
Chris
 

Jerrek

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Jul 26, 2003
Messages
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What I don't understand is at 512 Kbps the connection is so damn slow, why impose a cap in the first place??

<font color="blue"><b>The clock is ticking................... <i>1,174 kb/s</i> - I brake for no one</b></font id="blue">
http://home.cogeco.ca/~johannj/net_stuff/cogeco.jpg
 

Perdition

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Sure it's slow if you're a warez or media whore [;)] Most people use their connection for browsing and e-mail for which 512k is plenty... sure your 8mb connection might load pages a second or two faster but in the grand scheme of things these users don't care about a few seconds, they care about price.
 

Jerrek

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Jul 26, 2003
Messages
617
10, not 8. ;)


But if most people use it for web and email, then there is no need for a cap.

<font color="blue"><b>The clock is ticking................... <i>1,174 kb/s</i> - I brake for no one</b></font id="blue">
http://home.cogeco.ca/~johannj/net_stuff/cogeco.jpg
 

Perdition

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Fair enough, though I guess they're (understandably) structuring it this way to keep keep their heavy users on the more expensive packages.

Also we know our broadband bandwidth sucks, you don't need to keep reminding us. Even though it's expensive it's still way better than having no broadband options available at all [;)]
 

Bentley

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Dec 11, 2003
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<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by caroper</i>
<br />Now we know who Steve Whites mentor is, we just need to find his financial analyst.[;)]
<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

I think one of the points that Telkom are missing is that the broadband market is not looking for a one size fits all product, which ends up being too much at too high a price for some and too little at any price for others. Technically, they can provide 5Mbps ADSL on many lines, but they don't.

Also, with a word like 'basic' in the product name I don't think BT are aiming at the top bandwidth consumers out there anyway. There is a choice in the UK, you know.

ADSL is not only 'broadband' but also 'always on' Internet at competitve prices. (It really only is competitive because the only alternatives are other Telkom products - analog/ISDN dial-up or Diginet Plus.)

Disclaimer: I work for a UK-centric telecoms company.
 
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