Price war looms in corporate 100Mb market

Hundreds of megabits for hundreds of pounds

Exactly how disruptive it will be remains to be seen. The first "prong" of PowerNGN's rollout will be followed in April or May by a stage two announcement aimed at larger customers.

NetTek consultant Steve Kennedy said Exponential-e's rivals would not really struggle to compete on a purely technical level. "People like Thus and Cable and Wireless and COLT - and, of course, BT - will just change an entry in the database," he said.

But he acknowledged that life could be awkward for the bigger, more established companies. "People like Thus have had NGN technology for years, back to 2001, so they can just offer whatever the market says," he said. "But where they will have trouble is with long-term contract customers who will quite probably threaten to leave if they can't get the same terms as newcomers - and that could hurt."

Wade says he's counting on this.

"This is going to be a tough year," he said. "We have plans for a 50 per cent growth rate year on year, and that's what we've achieved so far; but 2008, without some disruptive innovation like this, would be the year we struggle to hit that. With PowerNGN, we think we can exceed it. By the end of the year, I'm hoping we'll have a lot of new customers."

The publicity for the launch says: "The internet connection you receive with PowerNGN 100 is called PowerServe - it is the highest performance professional grade internet service you can get in the UK. But, if you don't need the full 100 meg internet access, that's fine. You take what internet capacity you need, and then you split up the rest of the circuit for other services or applications.

"For example," it continues, "you might get a 30 meg internet pipe, plus a 20 meg SIP trunk for VoIP phone services, plus a 50 meg direct connection to your DR or data centre. Or, next week, you may cut the data centre pipe to 45 meg, and devote 5 meg for a direct connection to your office in Manchester for video conferencing."

The key to NGN in this market is the expectation that customers will want to chop and change in this way. It would normally cost the ISP a fortune to reconfigure a legacy network; but it's a simple flip of a switch under NGN (only by comparison, we bet). Managing it is cheaper, allowing price cuts and extra services.

BT promised to respond to our request for a comment, but was unable to find a spokesman before publication date. ®

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