Freelancers priced out of the broadband revolution may soon be tempted to join the high-speed experience thanks to UK Online, which yesterday declared a cut-price internet service for under £10 a month.
The firm’s 512 kbps offering, which means broadband at the slower end of the market, costs home users £9.99 a month – nearly half the price of BT’s cheapest package.
It comes at a time when the broadband market is bustling with competition, with the likes of AOL, Virgin and Freedom2Surf all slashing their prices to attract more customers than the 5 million snapped up by BT.
To retain its dominance, British Telecom has reacted by doubling its connection speeds over the last few months, allowing computer users quicker download times, as well as the option of using the internet as a phone line.
But the British giant, like its smaller rival NTL, has refused to cut its prices, despite successfully signing up one million extra customers in the last month, in addition to a further two million homes connected via cable.
However, under scrutiny from telecoms regulator Ofcom last month, BT has opened up its telephone exchanges to smaller companies, so that providers can tap into the network of the national provider.
This process, known as local loop unbundling (LLU), has enabled UK Online not only to undercut its rivals with the £10 package, but also to half the price of its fastest 8Mb (megabit per second) service.
BT is yet to offer such a high-speed internet connection, though computer users can now subscribe to the 8Mb service - the fastest broadband in the UK - for under £30.00 a month.
Broadband packages from UK online have been available since 1994, and the company says that beyond the initial installation fees of up to £25 for both their 8Mb and 512kbps service, “there are no hidden charges.”
The inroads into the market created by ISPs like Tiscali, UK Online and Wanadoo have helped to achieve the government target of making Britain the best country for broadband in the G7.
Yet according to one computer expert, the new cut-price package from UK Online could be the opening salvo of internet price war.
Dylan Armbrust, editor of Computer Active magazine said: “High-speed connection is now the same price as a dial up one, if not cheaper.”
His comments are supported from Andrew Craig, deputy editor of Web User magazine, who believes cheaper access could mean trouble for “old” dial up.
“In 2005 prices have tumbled and speeds have accelerated beyond a lot of people’s expectations,” said Mr Craig, speaking last week to the Daily Telegraph.
“It’s been driven by the number of people who want broadband. Old dial-up internet is extremely slow in comparison and there's no longer a huge price difference."
The news coincides with a declaration from the Government, that the target of 99 per cent broadband availability across Britain will be met “within weeks.”
Despite the pledge, the UK continues to lag behind Japan and world-leader Canada in terms of broadband market competitiveness.
The Government says that boosting ICT (information and communication technology) uptake across the country is a certain way to close regional digital divides, while bolstering broadband usage for the country as a whole.
The Prime Minister’s Strategy Unit said: “We need to create a country at ease in the digital world. Where all have the confidence to access the new and innovative services that are emerging, whether delivered by computer, mobile phone, digital television, or any other device, and where we can do so in a safe and secure environment.”
Apr 13, 2005
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