TheRateTart Broadband Guide
Contents
- Introduction
- How do ISPs make money from Broadband?
- How do I know which broadband package is right for me?
- Tips from TheRateTart
Broadband allows access to internet content at speeds far faster than dial up. Broadband really started to become a mass market product as recently as 2003/ early 2004. But high take up and intense competition have led to the product increasingly being seen as a commodity.
This is all good news for customers, as prices have dropped 50% or more in the last 2 years. Some providers have even offered 'free broadband' bundled with other services. However read the terms and conditions carefully before signing up to these deals. Many have a rather loose interpretation of the word 'free', and have fallen foul of the Advertising Standards Authority for using this term. TheRateTart guide to broadband will help you tell your uploads from your downloads so that you can save loads.
How do ISPs make money from Broadband?
The majority of broadband deals required the customer to sign up for a fixed term contract (typically 12-18 months) at a fixed monthly price. The internet service provider's profit margin is built into this monthly payment. All very straightforward...but in fact the glory days of this business model are already in the past. In August 2006 broadband accounted for 69% of internet connections in the UK. The market for broadband connections is approaching saturation point and increased competition is driving prices downwards. Fixed monthly payments are no longer able to generate the profit growth ISPs need to keep their shareholders happy. Increasingly ISPs view a broadband connection as the basic service from which other, more profitable products and services can be sold. This could include offline products such as pay tv or online services such as security software or back-up facilities for data held on your PC. For consumers the challenge is to get the best price for the combination of services they need and actually use.
How do I know which broadband package is right for me?
The majority of connections use either ADSL or cable technology. ADSL uses the telephone line into your home, which most people have. Cable is available to about 45% of UK homes, and an engineer can install it in your home if there's a cable in your street. From the users point of view, both perform the same function. We've split our comparison tables into ADSL and Cable offers to avoid confusion.
Answer these three questions in order:
How much do I use the internet? Most broadband packages require you to pre-pay for a specified level of usage. The amount you pay is based on the download speed (which is how quickly a fixed amount of data is downloaded to your computer) and download limit (how much data you can download in a given month). However for the average consumer matching raw figures to their own typical usage can be guess work at best. Use the tables below to get a more meaningful idea of what sort of user you are. Note all figures quoted are approximate.
Download Speeds:
| Connection speed | Time to download typical web page (100 kilobytes) | Time to download typical 5 minute song (5mb MP3 file) | Streaming Video Quality |
| 56k dial up modem | 14 seconds | 2.5 minutes | Low |
| 1Mb broadband | 0.8 seconds | 41 seconds | Low |
| 2Mb broadband | 0.4 seconds | 20 seconds | Medium |
| 6Mb broadband | Instant | Instant | High |
When considering download speed bear in mind that your ideal may not be achievable. The maximum up and download speeds are affected by factors such as distance from the exchange, quality of the wiring from the exchange to your home, quality of the wiring in your home and a host of others. BT's network is currently used for 90% of broadband connections, so use the test tool at www.btwholesale.com/getbroadband to get an indication of what speed you might be able to achieve. It's worth bearing in mind that more and more providers are installing their own equipment in BT's exchanges (a process known as "local loop unbundling").
Download Limits:
| Usage Allowance (Gb per month) | Number of web pages (100kb per page) | Number of songs (5mb MP3 file) |
| 1Gb | 10,500 | 205 |
| 2Gb | 21,000 | 410 |
| 6Gb | 63,000 | 1229 |
| 15Gb | 157,000 | 3072 |
By matching your own surfing habits to the table above you should get a good idea of the sort of package you need. If in doubt you might want to err on the lower end of the scale. Your ISP will have no problem letting you upgrade, but may be less ready to let you move to a cheaper package once you are under contract. Most ISPs will also let you top up your monthly download allowance at relatively low cost (budget on about £1 for every extra gigabite). If you are in the upper level of users on these tables you may want to consider deals on unlimited broadband usage to find a competitive deal.
Can I save money by using one supplier for several services? Cable companies such as NTL and Telewest have for some time offered broadband bundled with additional products and services such as home telephone and pay tv. The logic is simple. All the services are carried over the same cable, so once the basic infrastructure is in place, the cost to provide additional services is much reduced. This can also have benefits to the customer as the cost savings may be passed on. However the geographic coverage of the cable network is concentrated in towns and cities, with only about 40-50% of the country having access.
More recently companies have started to bundle broadband with products that do not share a basic infrastructure. Examples include mobile telephones or satellite television. The logic here is slightly more complex. By increasing the number of services each customer takes, companies are better able to understand habits and preferences. This in turn enables them to cross-sell other products and services more effectively. Companies are also betting that 'multi-play' customers are less likely to switch providers due to the increased hassle factor. Bundled deals can generate worthwhile savings for customers. But check the Terms and Conditions to see if and for how long good deals are guaranteed. Also investigate whether you can cancel some products or services whilst retaining others. If so what is the impact on price?
How important is good technical support when things go wrong? How much would being without access to the internet affect you? If the answer is 'not much' the the quality of technical support and/or customer service is probably a less important than price in deciding on a provider. But if you depend on internet access for work or spend a lot of free time online , consider balancing price with support reputation. There are a number of sources you can use to research this. Try internet discussion boards, Which consumer reports or talk to friends, family and work colleagues.
Many broadband deals specify in their terms and conditions that they are for domestic purposes only to prevent legal claims for lost business from any long term outages. If you are reliant on broadband access for your business, look into a business broadband deal with increased support levels. Before signing up though consider whether the level of support offered will actually help you enough to justify the increased costs. Having a 24x7 help desk is nice, but if all they can do is tell you there is nothing they can do, you may feel you haven't really got value for money. Check online discussion forums to see whether the extra support is helpful or not.
Tips from TheRateTart
Contract duration for most broadband providers is 12 months. But for some special deals this can be as much as 18 months. Make sure you know how long you are being tied in for and what you are signing up to pay if you do terminate the contract early.
Set up Costs are increasingly being waived by broadband providers in a bid to attract more customers. It is still worth checking the position with your chosen provider, as these can add £100 or more to the overall cost. A deal with a higher monthly charge but free set up costs could work out cheaper than a deal with lower monthly charges and high set up costs. If you are switching providers check your existing equipment is compatible with their service.
Customer Service help-lines often use '0870' or '0845' numbers. These numbers charge at the national rather than local rate. You can rack up significant extra phone charges making calls to these lines if reliability is a problem with your ISP. Check whether your ISP uses local or national rate numbers for technical support and/or customer service. Better still, choose a provider with decent reliability in the first place - use internet discussion forums, Which consumer reports or friends, family and colleagues to get a feel for the record of your short listed ISPs
Apple Macintosh computers are not officially supported by all ISPs. Check whether your ISP is happy to support problems being experienced by Apple users. If not, the ISP could have a convenient get out clause for any problem they cannot solve (i.e. blame the Mac). Even if Mac is officially supported, check how advanced this is. Is there a dedicated Mac support team? Is the supplied modem Mac compatible or do you need to buy your own? You can also use our comparison table for Mac Broadband.
BT line rental can add approximately £10 a month to your costs, even if both your broadband and land-line are with another provider. This is because in most cases BT still own the wiring that connects your house to the exchange. Following recently regulatory changes more and more companies are installing their own equipment in exchanges to avoid these costs. This process is known as "Local Loop Unbundling". Check the terms and conditions to see whether or not you will need to pay a separate line rental charge to BT.
The MAC Code or Migration Authorisation Code is a reference number required when switching broadband provider. If you want to be confident you will have an easy switching experience in future, check with the communications watchdog Ofcom to make sure your chosen supplier is signed up to the MAC code of practice.
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