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NewNet braces for customer losses

ISP's hefty price rise angers punters

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NewNet's CEO Peter Coates-Buglear says the company is likely to lose "quite a few" heavy users due to its recent price rises but believes that is better than restricting bandwidth on the sly without telling customers. Subscribers to some of its services will see prices go up by nearly 60 per cent.

The Register received emails from disgruntled customers protesting NewNet's decision to hike prices. The cost of its HomeB service jumped from £21.95 a month to £34.95. Punters were told before Christmas and complained long and loud on forums like thinkbroadband.com - previously known as adslguide.org.uk.

Coates-Buglear spent much of New Year's Eve on the site answering customer complaints. He said the company had given out a lot of MAC numbers but few have been activated yet: "We'll see what happens at the end of the month.". He said they chose Christmas deliberately so customers would have time to decide what to do.

Coates-Buglear told the Reg: "600 new HomeB customers have totally filled one of our 155Mb pipes. We've tried to be upfront about what we are doing rather than restricting bandwidth quotas or packet shaping but from a financial point of view we had to do something. There is a general trend for customers to use more and more bandwidth but the last couple of months have been particularly bad. We've got a good reputation among heavy users and to be honest that's worked against us. We've gained people from some of the ISPs which have gone out of business and also from PlusNet."

He said it was a difficult balancing act but he hopes not to increase prices for the next 12 months.

As bandwidth demand increases broadband providers are stuck between a rock and a hard place - they either raise prices or restrict bandwidth neither of which will endear them to their customers.

What do you think ISPs should do? Answers to the usual address please.

For broadband advice go to www.thinkbroadband.com/

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