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|uk.telecom.broadband (UK broadband) (uk.telecom.broadband) Discussion of broadband services, technology and equipment as provided in the UK. Discussions of specific services based on ADSL, cable modems or other broadband technology are also on-topic. Advertising is not allowed.|
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The broadband battle of Britain (Sunday Times article)
Focus: 'The broadband battle of Britain' by Paul Durman (Sunday Times 05/06)
More than 7m Britons have high-speed internet access and prices keep falling
as bandwidth keeps rising. Now the fight is on to use broadband to pump a
host of services into homes.
In Britain today, a new customer switches over to a broadband internet
connection every 10 seconds. After spluttering unenthusiastically into life
five years ago, Broadband Britain has finally arrived in earnest, opening up
new possibilities for music and entertainment, online shopping and more.
Today more than 7.4m computer users are connected to the internet with a
high-speed broadband connection. According to BT, the number of broadband
subscribers now exceeds those using "narrowband" dial-up services.
Gavin Patterson, managing director of BT's consumer division, said: "We have
passed a tipping point. We are beyond the early adopters and very much into
the mass market.
"Broadband is becoming a must-have. This year and the beginning of next year
is the key land-grab for customers."
And as competition hots up, consumers are being bombarded with offers of
lower prices, or higher speeds for data transfer, and sometimes both.
Last week NTL, the cable- television and telephony company, set a new
benchmark when it offered a 1 megabit/second (Mb/s) connection for £9.99 a
month, with the installation and equipment thrown in free. That is
two-thirds of the £14.99 price of the Anytime dial-up service from Wanadoo,
which still has 1.7m of its 2.4m customers on dial-up. A 1Mb/s connection is
about 20 times faster than dial-up.
Until two years ago, most broadband users were paying about £30 a month for
a 512 kilobit/second (Kb/s) connection. The NTL deal is offering twice the
speed for a third of the cost.
Bill Goodland, NTL's internet director, said: "We are very keen to encourage
new customers to move to broadband as quickly as possible. There are still
7m dial-up homes in Britain. When you ask those people how much they are
paying for internet access, anything in the broadband market is still quite
a big jump (in price)."
The dial-up customers that NTL, Wanadoo and BT are trying to persuade to
switch often have only a hazy idea of what a broadband connection might
offer them. The widely held belief among internet service providers (ISPs)
is that once consumers have experienced broadband, they will be very
reluctant to give it up, even to save a few pounds a month.
The advantages start with an "always-on" connection, and easier web-surfing.
But the real benefits lie in opening up capabilities that are all but
impossible over a dial-up connection: the ability to e-mail photographs to
relatives, to download music, to watch video clips, to play electronic games
with friends (or strangers) on the other side of the world.
David Ferguson, marketing director of Bulldog Communications, the broadband
company owned by Cable & Wireless, said a high-speed connection changes the
way people use the internet: "We are seeing more shopping activity. We are
seeing kids, and others, downloading huge quantities of music for their MP3
players. People are seeking out other forms of entertainment - DVDs, video,
Industry executives report that broadband is making the computer more
central to modern family life, eating into the time previously reserved for
watching broadcast television. The trend is set to continue as increases in
bandwidth (or speed) make it easier to deliver high-definition video
BT and Wanadoo, which is owned by France Telecom, are developing TV and
video-ondemand services for broadband.
Patterson said BT was developing a set-top box that would enable broadband
users to watch films and other video entertainment, delivered over a
high-speed internet connection, on their televisions.
This initiative could pose a challenge to Sky, NTL and Telewest, which
currently charge for inflexible bundles of TV channels. BSkyB, the company
behind Sky television, is 35% owned by News Corporation, parent of The
Patterson said: "There are a lot of customers who want more entertainment
and services but don't like the commitment of an ongoing subscription."
Consumers could be offered the chance to pay for only those films or
programmes that interested them.
It is not difficult to see the commercial potential of this broadband world.
What is hard to understand is why BT did not grasp the opportunities more
clearly back in 2001.
IT WAS less than four years ago that Sir Peter Bonfield, then BT's chief
executive, suggested the problem with Britain's broadband market was
essentially a lack of demand. He told the Royal Academy of Engineering in
October 2001: "Supply of broadband has been a preoccupation, when demand is
the main long-term issue."
At the time, Britain had only 160,000 broadband users - one of the lowest
adoption rates among OECD countries, and an embarrassment to Tony Blair's
vision of Broadband Britain. BT's decision to introduce broadband at a price
of £50 a month may have contributed.
The first attempt to introduce local-loop unbundling - giving rivals access
to BT's local exchanges - collapsed amid chaos and recrimination. Unbundling
was supposed to usher in a new era of infrastructure-based competition.
Without it, leading companies such as AOL and Wanadoo (then called
Freeserve) were left dependent on BT, having to resell BT's wholesale
product on unfavourable terms. With little scope for making money, the UK
broadband market took off slowly.
It was only when Ben Verwaayen took over as BT's chief executive in February
2002 that things started to change. Verwaayen put broadband at the centre of
his strategy for revitalising the struggling telecoms giant. Broadband sales
accelerated as Tiscali and others cut the monthly price below £20. The
market was stimulated again last year when Ofcom, the industry regulator,
forced BT Wholesale to lower its prices, thereby reviving interest in
unbundling. Wanadoo, Tiscali and Bulldog are among the ISPs investing
heavily to put their equipment into hundreds of BT exchanges.
They will join UK Online, part of Easynet, which already runs advanced
broadband services from 232 exchanges, having been the only telecoms company
to struggle through the earlier version of unbundling.
Two months ago, BT hit its 5m target for broadband lines a year early. In
addition to those receiving ADSL broadband over BT's copper wires, NTL and
Telewest supply broadband to a further 2.2m customers.
BT now presents broadband roll-out as a triumph. It suggests it has been
adopted faster than other important consumer technologies, such as the
television, the mobile phone, the CD player and the video recorder.
BROADBAND speeds are increasing. The leading companies, including BT, are
already upgrading the 512Kb/s services that were standard until last year to
1Mb or 2Mb/s, usually for no additional charge. Broadband appears to breed a
hunger for more bandwidth.
Last week Bulldog announced the launch of an 8Mb/s service for as little as
£15.50 a month. Although usage is limited to eight hours a month at the
introductory price, Ferguson said: "There's a significant group of people
who want to use high-speed broadband for the time they are online but don't
necessarily want to spend hours and hours online."
Chris Stening, general manager of UK Online, the unbundling pioneer that has
been offering an 8Mb/s service since last November, said the additional
bandwidth was soon soaked up as wireless home networks allowed two or more
members of the family to be online at any one time. "The iPod generation are
used to downloading music. They are spending more time on the internet than
watching the telly."
Figures released by EMI last week showed that 13 to 24- year-olds now spend
almost four times as much on music downloads as on CDs.
Higher speeds encourage a change in consumer behaviour. With an 8Mb/s
connection it takes only five seconds to download a song, and not much more
than a minute to download an album.
The small number of broadband users with connections faster than 2Mb/s has
discouraged wider availability of high-quality video content. For example,
iTunes, Apple's music store, has fewer than 100 music videos available on
This will soon change. In America, MTV recently introduced MTV Overdrive to
provide broadband access to music videos, live performance, interviews and
In Britain, the BBC is working on its interactive media player. This will
allow broadband users to download any programmes shown on BBC TV the
previous week. Some analysts suggest the BBC may ultimately use the media
player to make much of its archive available - perhaps free.
Broadband gives telecoms companies a chance to broaden their revenue
streams, and get away from the price-led marketing that has bedevilled the
Eric Abensur, chief executive of Wanadoo UK, plans to ward off inevitable
price erosion by giving consumers "abundance" - more and more services for
the same price. The £17.99 that used to buy 512Kb/s broadband now includes a
1Mb/s connection, a wireless router or modem, and free voice calls every
evening and weekend.
For consumers, the deals will just keep getting better.
Paul Durman (Sunday Times [Focus] 05 June 2005)
The broadband battle of Britain (Sunday Times article)
Interesting article. However, also interesting in light of the 'always
on' advantage of broadband, is that suppliers such as Bulldog, with
their so-called 'unlimited' service, have 2 packages that limit online
time to 8 HOURS a month !! (Extra hours at £1.50 per hour). Surely it's
nonsense to limit connection to a network to a number of hours, since
the overhead of that is small. Limiting or charging for bandwidth would
seem to be more logical - so what are Bulldog playing at ?
The broadband battle of Britain (Sunday Times article)
Interesting article. However, also interesting in light
of the 'always on' advantage of broadband, is that
suppliers such as Bulldog, with their so-called
'unlimited' service, have 2 packages that limit online
time to 8 HOURS a month !! (Extra hours at £1.50 per
hour). Surely it's nonsense to limit connection to a
network to a number of hours, since the overhead of that
is small. Limiting or charging for bandwidth would seem
to be more logical - so what are Bulldog playing at ?
ISP systems have limits on the number of simultaneous sessions they'll
handle, even if those sessions are otherwise idle.
For example a 34 Mbps BT Central will only permit 1600 users to login at
By limiting customers' online hours then an ISP might potentially be
able to support more users in total than if every user left their router
or modem permanently connected.
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