News Column


June 15, 2014

By Laura Shannon, Financial Mail on Sunday, London

June 15--LIGHTNING quick broadband is transforming internet use in the UK, with Coventry the latest to join York and Peterborough in an elite club of so-called 'Gigabit Cities'.

At a speed of 1,000 megabits per second, internet connections will be available to businesses at speeds of ten to a hundred times faster than most users experience. Next it will be homes to receive this service.

This fast-growing and competitive marketplace is driving down prices for ordinary users – and costs could fall further in the weeks to come.

Ofcom – the regulator for TV, radio, phone and internet – is cutting the wholesale charges suppliers have to pay to Openreach, the infrastructure wing of communications giant BT, from the start of next month. This could lead to further discounts, although suppliers are themselves pushing prices lower.

Charlie Ponsonby of Simplify- digital, a home communications comparison service, says: 'Consumers don't have a lot of disposable income, despite reports of an uptick in the economy. Suppliers are facing tough times so there is aggressive marketing by the top providers.'

Broadband-plus-TV packages are likely to be more competitive later in the summer when the new football season begins.

Households who see a better deal can also try haggling with their current provider to see if it will match or better a new offer, especially if the reason for a potential change is simply cost rather than service.

If the supplier refuses to negotiate, be prepared to follow through with the switch.

Prices range from pounds sterling 1.75 a month for six months rising to pounds sterling 3.50 with TalkTalk; pounds sterling 5 a month with Sky with weekend calls included; or pounds sterling 4.25 a month for six months rising to pounds sterling 8.50, again with TalkTalk, for broadband, digital TV and evening and weekend calls.

EE has also just announced that it will market fibre optic broadband to all households, not just its mobile customers. And anyone who wants an early escape from a rival provider can get up to pounds sterling 100 from EE to cover their cancellation fees.

Angie Rance, 28, wanted cheaper broadband rather than a do-it-all bundle. She searched for a new provider using website broadbandchoices.

By trading her pounds sterling 37.50 a month Virgin Media deal – including TV, broadband, phone and line rental – for a pounds sterling 28-a-month broadband and phone deal with EE, she managed to knock pounds sterling 100 off her annual bills.

Angie, who works as an assistant for a music agency, resents paying for line rental when she relies on her mobile phone for calls.

'The fact that nearly every provider makes you have it is frustrating,' says Angie, who lives in a house-share in Islington, North London. 'I'll switch again in the future and get rid of line rental and fixed-line broadband altogether.'

MOST households are still being hit by inflation-busting price rises for line rental, which covers the cost of delivering a phone line and broadband into homes.

The latest and fastest broadband available uses a fibre optic or 'cable' network, rather than the older copper wires. But most customers with fibre optic broadband must still pay line rental – the cost for which has risen by an average 38 per cent over five years to more than pounds sterling 15 a month, according to broadbandchoices.

Despite there being more companies selling superfast internet, they are charged for their dependence on BT's network – with the exception of Virgin Media. Many fibre connections are delivered only as far as a cabinet near your home, with the last bit of the journey covered by the old copper wires used before.

Dominic Baliszewski, a spokesman for broadbandchoices, explains: 'The status quo is for providers to charge one price for line rental and a separate additional fee for broadband on top.

'This gives the impression that line rental is only for a home phone, when in fact it is essential for broadband in most cases. It's unnecessarily confusing.'

The rising cost of line rental is frustrating to consumers who underuse it, but are forced to fork out for it nonetheless. A third of landline users say they think it represents poor value and a fifth think that it is an excuse for companies to charge more. Nearly two-fifths would ditch their landline altogether if they could get broadband without it.

YES – in one of two ways. Either by relying on mobile broadband, the technology used by smartphones, or by switching to cable or fibre optic broadband.

Mobile broadband is often criticised for offering a patchy and unreliable service, but it is getting better. The 'fourth generation' system known as 4G offers higher speeds.

New supplier Relish, which currently just serves homes in central London, but has plans to expand, is charging pounds sterling 20 a month for what it calls 'fibre-fast' internet using 4G and with no need for a landline. Customers need only plug in a device and wifi is available to computers and phones at home.

Virgin Media has a landline-free, superfast broadband deal for pounds sterling 26 a month – currently with a pounds sterling 5 discount for the first three months. But this is not available in every postcode.

Hyperoptic, which works with property developers to install a new network of fibre optic broadband into homes, offers 'gigabit fibre' broadband to select customers in London, Cardiff, Reading and Bristol. Soon it will be available in Manchester, Liverpool and Leeds too. It allows high-definition films to be downloaded in less than 30 seconds. Prices start at pounds sterling 22.50 a month for broadband only.

OFCOM accredited websites such as broadbandchoices, Simplify-digital and can be used to search for the full range of deals based on what is available in particular postcodes. These sites have been put through their paces with an independent audit, and have been checked and approved for accuracy and transparency.

For free advice about switching over the phone, broadbandchoices can be called on 0844 804 2430 and Simplifydigital on 0800 542 4704.

Baliszewski says: 'It's not just about price – compare all aspects of a package, for example reliability and the cost of call rates if home phone is included.'

Switchers should then ask their existing supplier for a MAC – Migration Authorisation Code – and offer this to the new chosen supplier, which will help smooth out the transition when a connection is transferred.


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Source: Daily Mail (London, England)

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