BT has repackaged its broadband products in a bid to distance itself from the bundled offers that plug "free" broadband.
BT has stepped up the battle in the broadband market by unveiling a new Total Broadband package offering interactive TV, videophoning and other integrated home media services.
The package is impressive but also quite expensive. Miles Brignall reports.
The move follows broadband and phone service launches from Carphone Warehouse and mobile phone firm Orange.
Instead of competing head on with The Carphone Warehouse and Orange by matching their aggressive pricing, BT has decided to take a different approach that packs a whole stack of features into one monthly price.
Total Broadband provides broadband download speeds up to 8 meg as well as a string of other features including VoIP, security software and a wireless hub.
The incumbent telco – which has some 2.5m retail broadband users – reckons its "Total Broadband" offering comprises the most comprehensive broadband packages yet seen in the UK and something that delivers "value for money".
The former telecoms monopoly said earlier this month that it had lost more than half a million retail customers to rival operators.
BT is struggling to fend off growing competition for residential customers.
Users will be offered the chance to make both voice and video phone calls via the web – with free VOIP calls in the evenings and weekends. They can also use their laptops in BT’s Openzones in airports and city centers, free for 250 minutes a month. In the autumn, BT will start offering its interactive television service, which will offer a range of new services and content, plus movies on-demand.
BT Retail chief exec Ian Livingston said: "The broadband experience is about so much more than just having basic access to the internet. Customers want their broadband to offer a range of exciting content and services as standard, without having to pay extra for these features."
The new package comes in three flavors starting at £17.99 a month for the entry-level service rising to £26.99 for its top bundle.
BT, the UK’s biggest broadband supplier, has chosen to keep prices near current levels – £17.99 to £26.99 a month, with discounts for three months. This makes it one of the pricier providers and flies in the face of price cutting across the market and the two "free" broadband offers.
But with a monthly charge of up to £26.99 a month plus line rental; BT Total Broadband remains more expensive than Carphone Warehouse’s new broadband service, which retails at £20.99 including line rental.
Customers paying at least £24 for the new Total package will receive a free state-of-the-art home hub that will deliver the capped services wirelessly around the house – at up to 8Mb. Householders can connect up to 15 devices such as radios and gaming boxes, as well as standard computers to the net at once.
However, Livingston said his company’s service would enable customers to do more than simply surf the internet.
Our competitors do not actually offer high definition talk, which gives you a much better quality of sound when you chat with your friends over the internet, he told BBC Radio 4’s Today Programme.
"They do not offer video telephony, they do not offer free wi-fi," he said.
Rather than focusing on the broadband pipe, BT is trying to generate interest in services that use high speed net access such as its Fusion batphone and its yet-to-be-launched internet TV service BT Vision.
BT also plans to add further products including a home security package that will allow consumers to monitor their house while on holiday. Until now, these services have been available to consumers individually; BT has brought them together in one package.
Although the advances will appeal to the more technically advanced households, BT faces an anxious wait to see whether the package is strong enough to grab the mass market.
In April, TalkTalk launched a much cheaper combined residential phone and broadband package for just £21 a month, including free landline calls. The mobile phone company Orange is also giving its customers spending at least £30 a month, free broadband.
But, as ever, it is up to consumers to read the small print to see if the offer available is right for them. BT’s Total Broadband Option 1 (its entry level service) comes with a 2GB usage allowance and users are also tied in to an 18 month contract.
Punters might also be tempted by the offer price of £9.95 a month – but this is only for the first six months, after which it reverts to £17.99.
Carphone Warehouse said earlier this month that it had signed up 340,000 customers to its new broadband offer, beating market expectations.
Chris Williams, head of broadband services at Uswitch.com, said BT’s offering is comprehensive, but expensive. "There are cheaper deals out there and BSkyB is about to launch its’ much talked-up broadband package – consumers may want to wait before deciding." For details, go to BT.com
| Broadband Cost Comparison: | |
| Carphone Warehouse Talk3: | £20.99 |
| BT Total Broadband Option 3: | £26.99 + £11 BT line rental |
| NTL Telephone & Broadband: | £32.99 |
| Tiscali Broadband & Anytime Talk: | £21.99 + £11 BT line rental |
Prices are for monthly standard rates; including some free landline phone calls and a minimum download speed of 2Mb