Competition in broadband - and I mean real competition not what passes for competition in the US - is such a beautiful thing. It works so well for the consumers. UK broadband is a perfect example.
A few months ago, NTL and Virgin merged to become Virgin Media, the largest broadband provider in the British Isles. They didn’t do such a good job of keeping their customers happy, and British Telecom surged ahead, leading to speculation that some private equity guys are going to buy out Virgin Media.
And while these two are jostling for the top spot, the little players are trying to do their best to lure customers, and offering all sorts of interesting combinations. Pipex, has started offering six months of 8 Mbps broadband (though with 2GB transfer cap) for free, as long as folks sign up for $25-a-month voice plan (unlimited local and national calls). Of course there is Carphone Warehouse with its Free Talk Talk offering.
(I wonder if any of our readers are tracking the broadband prices in UK and if they are really heading south.)
6 comments so far
3:05 PM PT
I’m in the UK. My broadband has gone up by 2 pounds a month recently with Virgin Media (although they tell me I’ll be upgraded to 20 meg real soon now).
Talk Talk broadband are a national joke. Their reliability and customer service is abysmal.
7:45 PM PT
It’s not clear UK is not just the US market of 7 years ago when the CLEC’s started dropping like flies. Obviously the technology for DSL and the web is more advanced and can support more competition than back in 2000, but the economics of the unbundled competitors look almost as weak. Pipex’s losses aren’t in the staggering neighborhood of Rhythms, Covad, Northpoint, McLeod and Allegiance, but they are still pretty high for a company its size.
Carphone has got most of the BT competitors giving away the low-end DSL just to keep customers for their other services. This is not sustainable (outside of France). C&W shot the bulldog, and others could follow. The wholesale line rental is still above 9 Pounds, but that’s not as expensive as per bit costs. That’s why Pipex caps at 2GB.
Since BT is stopping at ADSL2+, so are all of the competitors (for now). Let’s see where UK sits in the world ranking in 5 years.
11:48 PM PT
There is a lot of price competition in the UK, but BT’s success has proven that quality service and a quality product can allow you to hold your prices even in the midst of ‘free’ services. Despite all the money spent by the competition BT managed to gain a 32% share of net adds in the last quarter.
The one to watch is BSkyB who are outspending everyone in the market at the moment, and it appears to be working.
4:51 AM PT
The UK DSL wars reminds me of the long distance market wars. AT&T kept 70% market share for the longest time even with Sprint, MCI and Qwest virtually giving away service. Most consumers stayed with the familiar. In the end, I think it will consolidate down to BT, Virgin & Sky all offering similar 3play bundles.
10:03 AM PT
We deal with end users trying to make sense of it all. There really is no such thing as a free lunch - when IPTV services (and iTunes) start to move large amounts of data around, deficiencies in network planning (and investment) will become painfully obvious. The services maybe “free” but gamers will tell you that traffic shaping makes many services unusable. In the end you get what you pay for…
7:15 AM PT
Kate said: “C&W shot the bulldog, and others could follow.”
What does “shot the bulldog” mean? Is that like “jumping the shark”?
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