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internet basics: Free broadband?

02 November 2006

How can anyone offer "free" broadband?
Well, of course it's not free. What Carphone Warehouse is offering is a package deal: you rent a telephone landline for £11 per month (instead of doing so directly from BT), and you buy its Talk3 International Calls package for another £10 per month. Then you can have broadband access for no extra charge - or, looked at another way, you pay £21 for broadband, and get a large number of free phone calls.

The phone package includes unlimited calls to UK landlines, TalkTalk mobiles, and 28 foreign countries. The broadband package includes 40Gbytes a month at up to 8 Mbytes download speed. But it requires a minimum contract term of 18 months, which costs at least £70 to break. There is also an initial fixed £30 connection charge. For full details, see www.talktalk.co.uk.

However, be warned that there may be a severe delay. For example, when I tried to sign up this month, I found the phone service would take three weeks to activate, and the broadband would not be available to me until the end of August. The main reason for this is that it is only being offered in areas where TalkTalk has installed its own equipment in BT exchanges (local loop unbundling or LLU). It plans to cover only about 70 per cent of the population initially.

Won't this precipitate a price war?
Yes, it has already. And it may even lead to a decline in the quality of service provided, as ISPs try to cut costs while making competitive offers. So I recommend caution in changing suppliers if you already have a broadband connection.

Who else is planning what?
Many other ISPs are offering voice services to their broadband customers - for example, Pipex already includes 500 minutes per month of free calls to UK 01 and 02 numbers in its £15 per month Pipex Start broadband package. See www.solo.pipex.net/slides/specialoffers. From July, PlusNet will offer new products combing broadband and voice, www.plus.net/features/promotions/landline_faq.shtml.

BSkyB is planning to launch a residential broadband service this summer. Although no details of pricing are available, it is likely to offer existing satellite TV customers a very attractive package. The company has already installed its own LLU equipment in some 300 exchanges, and it plans to reach enough to serve about 30 per cent of UK homes by the end of June, with 70 per cent coverage by the end of 2007. If you are already a BSkyB customer, it's definitely worth waiting to find out.

What about cable companies?
NTL and Telewest (if one of them passes your door) ought to be able to offer good package pricing of broadband with telephone and/or television, at least in comparison with BSkyB. But they, together with AOL and BT itself, have just come last yet again in a customer satisfaction survey. Read about this at www.theregister.co.uk/2006/05/05/uswitch_survey.

Simon Sarmiento is UK and Europe editor of Anglicans Online.

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