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Thursday, 11 July, 2002, 07:56 GMT 08:56 UK
Broadband providers back need for speed
PC
Will users pay for super-fast broadband?
Broadband users could pay a premium for faster connections as providers look at ways of making more money from high-speed services.

Operators that ignore the idea of superfast premium services do so at their peril, warn cable operators who already offer tiered prices for broadband.

Currently most operators offer a standard 512K per second service for between 20 and 35 which gives users around 10 times faster speeds than dial-up access.

But cable operators NTL and Telewest have realised that there is a market for even faster broadband and both have launched a 1MB per second service for its customers.

No turning back

It is more expensive. Telewest's service is 39.99 per month, falling to 35.99 if users take other services from the cable firm. NTL charges even more - 49.99 per month.

Broadband speed and prices
BT's 1Mbps service for businesses: 60 per month
Telewest 1Mbps service: 39.99
NTL's 1Mbpsservice: 49.99 per month
But for those that have upgraded there is no turning back.

Lydia Wood is among dozens of happy users who have contacted BBC News Online.

"I have had the Telewest Blueyonder Broadband cable service for over a year now and have just upgraded from the 512k connection to 1Mbps," she said.

"As my partner works with computers and I work from home, we could now never imagine having a dial up connection ever again.

"The speeds are wonderful, maybe 35 a month seems pricey, but we used to spend that on phone calls."

Speed options

Telewest believes that ISPs that ignore the idea of tiered pricing for broadband risk going under.


Those ISPs that get this right will meet consumers' needs and continue to thrive, while those that get it wrong will jeopardise their business success,

Chad Roube, Telewest
"Customers' needs and expectations evolve as their tenure and usage patterns increase and successful ISPs will develop targeted value propositions to meet the needs of distinct segments," said Chad Raube, head of internet services at Telewest.

"Tiered service offerings are therefore an essential element of any leading ISPs product portfolio.

"Those ISPs that get this product equation right will meet consumers' needs and continue to thrive, while those that get it wrong will jeopardise their business success," he said.

NTL is also convinced that offering premium high-speed services makes a lot of business sense.

"The faster your connection, the more you can do," said Director of Internet Services Bill Goodland.

"ISPs that don't offer it will find that over time customers will get more and more frustrated and, we hope, desert them for cable."

Tiny fraction

While the cable operators have seen the benefit of pay-for-speed services, for the 200 or so internet service providers that take their ADSL wholesale from BT it is not an option at the moment because BT only offers one version of broadband.


More speed of itself will not necessarily chime with the mass market

AOL spokesman
"There was a 1MB offering from BT but it was for businesses and was nowhere near mass market prices," said a spokesman for AOL, one of the ISPs that relies on BT for its ADSL service.

He is not convinced the market is mature enough yet for tiered pricing to attract consumers.

"Mass market broadband is very much in its infancy in the UK and only a very tiny fraction of online household have any sort of broadband connection," he said.

BT in trouble

While the promise of even faster speeds may attract the early adopters of broadband it may not appeal to everyone.

"More speed of itself will not necessarily chime with the mass market," said the AOL spokesman.

BT may not offer superfast services to customers at the moment but its advertisments suggest that it does, and it must change them says the Advertising Standards Authority (ASA).

Following a complaint from Telewest, BT has got a rap over the knuckles from the ASA for confusing customers about how much speed they could expect from their ADSL service.

"The advertisement implied that a connection "up to 40 times faster" was standard for domestic customers and businesses.

"Because that implication was not true, the Authority concluded that the claim was misleading and advised the advertisers to amend the advertisement," read the ruling.

Telewest believes it is unhelpful that BT is confusing consumers in this way.

"Consumers are having a hard enough time getting their heads round broadband, without BT getting its sums wrong," said Telewest's Marketing Director David Hobday.

See also:

03 Jul 02 | Science/Nature
29 Jun 02 | Science/Nature
28 Jun 02 | Science/Nature
27 Jun 02 | Science/Nature
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