The telco contrasted its BT Broadband Basic, which will cost £19.99 a month, to packages from cable broadband providers such as NTL and Tiscali, which cost less than typical ADSL subscriptions, but offer lower speeds. BT Broadband Basic will offer a 512Kbps connection, the same as the more costly BT Broadband and BT Yahoo Broadband, but will introduce a usage limit of 1GB per month. All technical support must be conducted online, with a 60p/minute charge for telephone support.
"We are the first with a full half-megabit service at under £20," said Duncan Ingram, managing director of BT Openworld. "We don't want to restrict customers in their speed for downloading or surfing. We think the 1GB-per-month usage quota is pretty generous. It is plenty for around half the broadband users out there."
He said the ability to offer exclusively online sales and support was a recent development made possible by improvements to BT's online systems. The majority of BT Openworld's orders and contacts for assistance are now made online, Ingram said.
The new package will cost £19.99 for Direct Debit customers, or £20.99 for others, for a 12-month minimum contract of service. Besides the 1GB limit, the service has a number of limitations that could make it unattractive for users of more pricey services: it can be used only with one PC, and does not support home networking, for example. The service can only be used with the Voyager 105 DSL modem. Other services can typically be used with any modem, and allow multiple PCs in the home to connect to the Internet at the same time -- considered to be one of the main benefits of a broadband connection.
Existing users of other BT broadband packages wishing to downgrade to the cheaper service must pay the same £30 connection fee as new users, as well as paying for the £50 Voyager 105 modem. "Users can downgrade if they wish, but we don't envisage it to be a significant issue," Ingram said.
BT will initially not enforce the 1GB limit, allowing customers to get settled into the service. During the spring, tools for customers to monitor their own usage will be introduced, and the limit will be start to be enforced in the summer. Ingram said BT wants to avoid the customer-service issues that have plagued some other providers of capped broadband. "We are putting customers first in this, initially ensuring that it's a good customer experience," Ingram said.
BT's price cuts in recent months, bringing full-featured broadband packages to under £30 per month, have resulted in a sales boom that recently took BT's own ADSL customer base over the two-million mark. However, industry analysts have said that price-cutting in the UK and elsewhere has levelled off recently, as telcos attempt to increase their margins based on existing prices.
BT said its margins for BT Broadband Basic are similar to those on other broadband products.
Ingram said the Basic service uses the same ADSL wholesale components as the higher-end services, and that there is nothing stopping other ISPs from following BT's lead. "Anybody can do this, but so far we are the only ones that have thought of it and implemented it," he said. "It depends on a company's ability to serve customers well online. We now have that confidence."
Most ISPs competing with BT Openworld rely on BT's wholesale products for their own ADSL services.
On 11 March, BT will announce more of its strategy for consumer broadband, including applications and content, Ingram said.
Talkback
Perhaps BT should check www.plus.net - its been 18.99 for a while now....
I have been enjoying 'full 1/2 megabyte' broad band for over a year now with Gio Internet for GBP < £20. The service has been great with the only hiccough being down to BT and work on the local telephone exchange
If you thinking of what BT have done and the fact that BT are saying they are the first to think of it and then implemented it makes you wonder whether this deal is value to the end user. The facts are plain to see if you calculate the cost over the 12 months of the contract you end up with the same costs as a full on £27.99/month service that offers the customers free modem and connection. What BT have done has been thought out by most ISP's but what BT failed to understand is that the offering of £19.99/month will have its true colours painted in the clear light of day. As the visually impaired to price customers snap this up they will soon understand that BT isn't so far off the way the current government in the employing the stealth tax theory. What BT have done is to ensure the same margin by purely moving round the costs and even managed to limit the VAS that normally come for free with a product of this type.
If you look at it like this the full costs of Broadband is lets say 12x£27.99 with Modem and Connnectionn fee (£80) this calculates on a monthly basis as about £415.88/12=£34.65
most ISP's waiver the connection fee and modem price and therefore means the monthly cost is £27.99 for the 512 Mb service with emails and no limits.
But BT with their £19.99/month service creates the follow scenario.
12x£19.99= £239.88 with the addition of £80 gives £319.88. If you create the monthly scenario from this you get £26.56 which affectively works out at £1.33 cheaper per month this cost is therefore related to no email addresses, limited downloads, no frills. So would you say that £19.99/month is such a compelling story to tell considering you save only £1.33 per month.
If you look around the market place you can get a better offer than that without having to give up the email addresses and unlimited download.
Example: I noticed in the Sunday Times Magazine an offer of 1 month free trial with "No ties" after this trial you can cancel without entering into a 12 month contract. If you were to carry on you would affectively have the following scenario.
11x£27.99= £307.89 you get a free modem and free connection so therefore the actual monthly price spread over 12 months is £25.65 per month which when you work it out becomes some what of a better proposition to the end user. The other thing is there is no limited download and you get an email address. The cost difference between the Sunday Times Offer and BT's £19.99/month offer weighs up in favour of the Sunday Times offer and you get to trial it too with no obligation to entering into a contract.
Conclusion:
Sunday Times Magazine Offer
£25.65 per month
BT £19.99/month offer
£26.56 per month
It is better to shop around and not see the monthly fee as the be all and end all of the product. There are better deals to be had out there and BT is as always being devious and cunning to try to hook those who are less able to understand the pricing. So I feel its down to the press and such like to open the end users eyes to this and actually show it as it really is, because you report facts not spin or do you???
Check it out for yourself....
"We are the first with a full half-megabit service at under £20," said Duncan Ingram, managing director of BT Openworld. - maybe he should check the competition first, we have had this for £17.99 for the last year, rising now to their current price of £19.99, with Gioserve.
It appears to me that this is not a great deal from BT. They are not offering cheaper BB and the current state of the market is not improving. I feel we are being ripped off in the UK, because in Asia (eg. Japan and S. Korea) the basic service is 8Mbit going up to 42Mbit and the cost is about the same! If BB is going to cost £20 - £30 on average then at least they can give us more bandwidth without these ridiculous restrictions such as only one compatible modem and no sharing.
CONTACT US IS A JOKE. FROM BROAD BAND
ONCE THEY TAKE MY MONEY THATS IT!