Feeds

Carphone unveils 'free' broadband

'Broadband a right, not a privilege'

Next gen security for virtualised datacentres

The Carphone Warehouse has fleshed out details of a new bundled broadband and phone service that is half the price of its nearest rival. The offer, which is being plugged as "free broadband forever" massively undercuts similar services from leading players such as AOL, BT, and cableco NTL:Telewest.

To take up the offer punters must subscribe to Carphone's TalkTalk fixed line phone service. For £9.99 a month, punters get unlimited local and national landline calls, unlimited international landline calls to 28 countries and up to 8 meg broadband access.

In addition to the monthly fee, customers are also faced with paying a monthly line rental charge of £11.00. The total cost of line rental, calls and broadband is just £20.99 a month.

A similar package from BT would cost more than £55 a month while rival local loop unbundling outfit Bulldog can currently do it for just over £42 a month.

Announcing its ambitious plans to cut more than 60 per cent off the average cost of residential phone and broadband bills Carphone chief exec Charles Dunstone said: "The residential telecoms market in the UK will never be the same again. From today, broadband is a right, not a privilege."

Carphone is able to offer such competitive prices because it is investing megabucks in local loop unbundling (LLU) - a process by which it installs its kit in BT's telephone exchanges to provide services direct to end users.

Even though Carphone's targeting 1,000 exchanges serving around 70 per cent of the UK population, it means a sizeable minority of people in the UK will not be able to subscribe to this offer at this price. Punters outside Carphone's LLU footprint will have to stump up an extra £9.99 for the package.

Anyone signing up to the service is also tied in to an 18 month contract, must adhere to a 40 gig a month download limit and shell out a one-off £30 connection fee.

Of course, all of this doesn't come cheap. The firm reckons that this investment will result in an operating loss of around £50m this year. Add on the investment in LLU, operating losses and all other associated costs, and the firm reckons it will set it back around £110m. However, it reckons that by 2008 it could soon be payback time with an operating profit of £30 - £40m.

Said CFO Roger Taylor: "We believe that the investment and short term profit impact are fully justified by the rapid recruitment of customers to ensure higher penetration of our unbundled exchanges. The pricing reflects what we believe to be the real costs and benefits of providing residential telephony and broadband through unbundled exchanges."

Carphone has around 2.6 million residential voice customers in the UK under the TalkTalk brand. As a result of this aggressive pricing strategy it aims to have 3.5 million residential customers by March 2009, of which over half are likely to be combined voice and broadband customers. ®

Boost IT visibility and business value

More from The Register

next story
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
PwC says US biz lagging in Internet of Things
Grass is greener in Asia, say the sensors
Ofcom sees RISE OF THE MACHINE-to-machine cell comms
Study spots 9% growth in IoT m2m mobile data connections
O2 vs Vodafone: Mobe firms grab for GCHQ, gov.uk security badge
No, the spooks love US best, say rival firms
Ancient pager tech SMS: It works, it's fab, but wow, get a load of that incoming SPAM
Networks' main issue: they don't know how it works, says expert
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.