By Steve Ranger, 3 July 2008 17:10
COMMENT
It might sound like something from the seedier side of the internet - but naked DSL might just be the next big thing in broadband.
It's basically a DSL broadband service - but without a standard phone line and the expensive line rental that goes with it. It's an increasingly attractive option around the world - Australian ISPs began offering it late last year for example, as do companies in the US and Europe.
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But if naked DSL were widely adopted in the UK, the incumbent service providers would lose some revenue, both from those consumers who decide they can do without a landline at all and from those who would migrate to VoIP services over their broadband connection instead, which can work out cheaper.
Combine that danger with the use of mobile outside the home and you can see why telecoms providers haven't exactly been falling over themselves to offer this service in the UK - although throw in fixed mobile convergence and the picture gets even more complicated again.
Understandably VoIP companies - such as Vonage - have been complaining about the lack of naked DSL in the UK for a number of years.
Now of course it's in the interest of companies like Vonage to end the connection between broadband and the landline. But at the same time it's increasingly hard to justify the existence of a separate line rental cost, which for many people is now simply an extra cost if they want broadband.
Telecoms watchdog Ofcom's view on this part of the market - from its statement on the regulation of VoIP from last year - is that industry is best placed to agree requirements for the provision of any such product.
But I wonder how much pent-up - perhaps even unconscious - demand there is for naked DSL. I've certainly heard gripes from consumers who wonder why they have to pay for a landline that they have never even plugged a telephone into.
Inevitably, network investments have to be paid for somehow and the introduction of naked DSL would likely mean prices would go up somewhere else.
But changing the model would make pricing clearer and potentially increase the market for broadband - and therefore internet-based services in general.
Of course there is a chance that wireless adoption will make the whole discussion irrelevant. As the price comes down and coverage improves, wireless will make the landline and wired broadband less attractive options.
It's no surprise that mobile operator 3 has recently been advertising its wireless offering with the tagline 'no need for the fixed line'.
Perhaps if wired broadband providers want to protect themselves against this new threat and keep their customers happy they need to look at their own pricing models - and ditch the line rental for good.
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Comments
There are 7 comments. Join the discussion
1. Roy Corneloues
I think its too early to tell on whether wireless broadband will help pick up. Recent stories on here about wireless broadband have prompted responses of "speeds slower than dial-up". I think there is still a way to go.
2. Antony Norris
You can't just state the fact that Australia has been offering naked DSL without taking a quick look to find out why they can. Unlike the UK Aus telcos charge like wounded bulls for everything including limited data allowance DSL, for example an average consumer 'naked' deal here is £50 for 15GB limit on a 8MB connection (exchange rate as of 6/08, also compared with a BT provided exchange (BT = Telstra, similar kind of issues). Now compare that with the UK ADSL prices and add the line rental on top, who comes out cheaper, UK or Aus?
3. M Hazell
I would fully support naked DSL, especially with fixed mobile convergence - but there is a nasty hidden catch that some with only a mobile have found already - it affects your credit rating. Apparently some organisations are too lazy/cheap to do their own credit checking and rely on the like of BT to do it for them - ie you have a fixed line you are ok for credit, if not NO THANKS!
4. Chris Goodman
Perhaps the wireless network operators should consider severely cutting their charges. As they have virtually no network cabling to maintain and wireless equipment is so much more reliable than 10 years ago, I fail to see why a mobile call minute costs more than a landline minute - other than to subsidise buttons and whistle handsets.
When the user price drops then very convenient naked DSL will come into it's own.
5. Nick Cole
The landline connection is the bit of technology that connects your home to the local exchange/distribution point. No landline no connection!
This incurs a maintenance and provision cost. If you then connect a phone into it then the phone calls you make incur a charge, but are also routred differently.
This separation is perfectly reasonable.
The broadband charge relates to your ISP's delivery of their services which happens to be (unless wireless) via your local landline (local loop) connection usually supplied by a different party.
6. anonymous
The cost of providing fixed line communication lies first in installing and maintaining the physical line and secondly in the cost of the exchange equipment. Only the latter is saved in naked DSL. The marginal cost of making a call is close to zero. Thus abolishing fixed line charges makes no sense though perhaps unbundling the line from the switch does.
As wireless communication becomes faster and cheaper the fixed line operators will need to improve their offer to compete. Substantially faster speed is the obvious offering, which should command a premium price.
7. anonymous
As per usual the press get hold of a subject and leave out half the facts in order to fabricate a debate. There is not enough radio spectrum to provide broadband speeds across the whole of the UK. Couple that with ever higher requirement for speed and data downloads. Then you get to see that until radically new technology is unleashed its a wired world.