By Jo Best, 11 April 2006 12:00
NEWS
Carphone Warehouse has put an end to speculation on its free broadband product by revealing what it calls 'free broadband forever'.
For £9.99 a month and an additional £11 line rental, Carphone customers will get free local and national calls within the UK; free landline calls to 28 foreign countries including Australia and the US; as well as up to 8Mbps broadband.
Those signing up to the package will also need to pay a one-off connection charge of £29.99.
Rumours about the promised 'free' service had raised expectations that it would be priced at £4.99 a month, rising to £14.99 a month after three months.
The new Carphone offering comes in at roughly the same price as other dual-play services, such as Bulldog's which offers 8Mbps broadband and landline for £20.25, although calls are not free.
According to Ian Fogg, analyst at JupiterResearch, 'free' broadband as part of service bundles could mark the start of a change in the UK broadband market.
"Once one ISP starts to lower prices, it puts tremendous pressure on the others," Fogg said. "For ISPs that just offer broadband, it will become harder to compete with those that can do cross-subsidies."
Comments
There are 11 comments. Join the discussion
1. John Smith
And only if BT doesn't control your exchange! Otherwise you get the following message: -
Because BT still controls your telephone exchange and we have to connect you through their equipment, we can't offer you broadband for free.However, we can offer you high-speed broadband at the great price of just £10 per month, when you sign up to our Talk3 international calling plan.
2. anonymous
This is a clever marketing ploy from a clever marketing team. However, the UK is probably the most competitive market for broadband in the world and this is just one more low-price offer in a crowded market. It's important to look behind the detail of some of the marketing hype and here are some of the facts you should be aware of:
· The Carphone Warehouse offer is not available in one third of the country. Anyone living outside an urban centre has to pay an extra £9.99 charge.
· After the first two weeks, a 20 minute call to the Carphone Warehouse technical helpdesk costs £10, compared to 60p with BT.
· Carphone Warehouse's service isn't really "free" - they are charging all their customers a £29.99 "connection fee" and you have to sign up to a calls package costing £20.99 a month.
3. anonymous
Not actually free at all then
4. Matt
In this country, you get nothing for free! Anyone who thinks / believes otherwise is a fool, especially when you deal with large companies like BT et. al.
Instead of lowering the prices, why don't they also increase the speed, both downstream and upstream. Maybe then we can achieve some kind of broadband connected country, remember, just because they're giving you upto 8Mb downstream, doesn't necessarily mean your connection is going to be better, your connection is dependant on your upstream.
5. anonymous
I currently pay £20 for my broadband £11 rental to BT and around £10 a month in call charges to Talk Talk. If I sign up for this offer I will save myself around £20 and get unlimited International calls.
I'll wait a few months to see how other people rate the service before commiting myself, but Im not going to pour cold water on it before its even launched like some have done.
6. Guy Reynolds
Having scoured their website, nowhere can I find a specification for this product.
There is a 40GB download cap but has anybody seen what the contention ratio is for this service?
7. anonymous
Oh for gods sake, give them a chance.
Reminds me of the early days when screaming.net were the 1st ever uk isp to offer unlimited dialup for a fixed fee.
Eveyone jumped on baord and caused service levels worse than even NTL are now!!.
Saying that though remember that they were pioneering the way forward, watch this space and before we all "poo poo" the idea, see where this leads.
If my ISP doesn't compete fairy soon and I hear no adverse reports of SLA's I will consider switching.
8. anonymous
So, a possible broadband price war is on the cards? Found this online interview which also analyses the challenges for Carphone Warehouse and predictions for the future broadband market...
http://w3.cantos.com/cantos/dyn/org.php?o=27600023&s=34200030&CantosSID=7a71b0dc024e54765d0e2a23cdb04ac9_C
9. anonymous
So, a possible broadband price war is on the cards? Found this online interview which also analyses the challenges for Carphone Warehouse and predictions for the future broadband market...
http://w3.cantos.com/cantos/dyn/org.php?o=27600023&s=34200030&CantosSID=7a71b0dc024e54765d0e2a23cdb04ac9_C
10. Paul Taylor, VoiceFlex
The Carphone Warehouse announcement is ground breaking by anyone’s standards. It has left the competition stunned and thinking how best to respond. Given that The Carphone Warehouse will lose £50m in the first year of this offering, it is difficult to see a way for the competition to better the deal and still make money.
However, it is not that difficult to cut a deal that works especially given that nearly 40 per cent of calls are to mobile phones and these are costed items between 12p and 20.5p per minute depending on the mobile carrier you are calling. And strangely if you use the Internet via dial-up it costs 1p per minute. Maybe The Carphone Warehouse is working on the assumption that users prefer the comfortable feeling of slow Internet surfing?
What The Carphone Warehouse has managed to do is turn the model on its head by marketing free broadband. However, free phone calls when you pay £21 per month for broadband doesn’t really have the same dramatic impact. The free broadband tag has worked and should result in achieving the 75 per cent broadband saturation the market is looking for by 2007.
The offer may look appealing at first glance but the sign-up fee, 18 month contract and additional call costs does take the edge off it. Will the model break as Google-type WiFi services appear and local loop unbundling goes the same way as 3G?
Any publicity on VoIP is good for the industry; making calls over the Internet is becoming mainstream in the residential sector and moving out of the early adopter stage within the commercial sector. Price is not the only consideration, even though free calls are attractive, it is also about the flexibility the application provides.
11. Steve
Why not get free orange broadband, if your monthly mobile bill is in excess of £35 permonth you can switch to orange and get a free live box wired and wireless. The broadband is not the best but its free!