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Friday, 20 September, 2002, 07:53 GMT 08:53 UK
Cut-price broadband on offer
Man surfing
How low can it go? Broadband just got cheaper
Broadband in the UK has just got a whole lot cheaper with one company launching a high-speed internet service for a mere 12.99 per month.

However, surfers rushing off to sign up to the service, offered by internet service provider FreeDial, may be disappointed as it is already approaching full capacity.

Determined not to fall into the trap of other cheap broadband providers, FreeDial has limited the initial offer to 1,000 subscribers.

The rest, and thousands have so far applied, will be put on a waiting list for the next roll-out in November.

Orders triple

FreeDial admits that it will be subsidising the service with its more expensive broadband offering and makes no bones about the reason why.

"The idea is that by selling a subsidised product we will attract a broader customer base and subsequently improve sales in our other premium products," said Managing Director John Nicholas.

It appears to be paying dividends.

"It has been a bit hectic here for the last few days and we have seen orders for our premium service triple," he said.

There is one catch to the cheap deal - customers must buy the modem equipment from FreeDial at a cost of 88. There is also an 80 connection fee.

Public apology

We haven't been able to deal with demand.

Don Day, ET Global Solutions
Other companies, he said, have over-stretched themselves, something FreeDial is intent on not doing.

ET Global Solutions, one of the first UK providers to offer broadband for below 20 does not seem to have avoided that trap.

Complaints from ET Global Solutions customers about delays in being connected and being over-charged for their 18.95 per month service, has led Managing Director Don Day to issue a public apology.

"We haven't been able to deal with demand. At the end of the day it is very hard for an Internet Service Provider (ISP) to operate on such tight margins," he explained.

Disgruntled ET Global Solutions customers will be pleased to hear they will be released from their 12-month contracts and can now claim a full refund from the company.

Mr Day has one piece of advice for FreeDial.

"Don't do it."

FreeDial however is determined that it will succeed with its cut-price service.

"We are in this for the long haul and have the finances, resources and background to be able to carry out our commitments to the full," said Mr Nicholas.

"We are determined to provide a service of integrity, stability and efficiency at an affordable price."

Sacrificing coffee

Some industry watchers have questioned how ISPs can afford such rock-bottom pricing.

BT, from whom all ISPs rent ADSL lines, has always insisted that it is not possible to offer a profitable broadband service for less than 27 per month.

The same idea of 'subscribers now, profit later' was adopted by dial-up ISPs in the early days of unmetered access but many floundered leaving a trail of frustrated consumers.

If the service proves to be a good one though, few surfers would be without their broadband connection.

According to a US survey, 78% of internet users would rather give up their daily newspaper than live without broadband.

And 63% of respondents would even sacrifice their morning cup of coffee rather than lose their high-speed internet connection.

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