Battle of the broadband as the big boys square up for price war

02 November 2007
Three of the UK’s biggest telecoms, broadband and digital TV providers are gearing up for a price war after Sky announced its one millionth customer had signed up to the latest Sky offering; sky broadband.

Currently, Sky BSB stands in sixth place behind BT, Virgin Media, Carphone Warehouse, Tiscali and Orange all of whom have stepped up their game since it was announced that Sky was going for a slice of the broadband market some 14 months ago. This move online also follows last year’s deal between BT, Virgin Media and Carphone Warehouse who split up a £370 million share of AOL UK.

Since June 284,000 subscribers have joined up to Sky’s new broadband package. BSkyB’s Director of Broadband and Telephony, Della Bushell said that the company is “directly on target” to achieve a position as one of the UK’s top three internet access providers and aims to have signed up three million broadband subscribers by 2010.

Earlier this year Carphone Warehouse fired the first shot in the UK broadband price war when it unveiled a £21-a-month offering, which includes line rental, unlimited broadband access and free landline calls in the UK and 28 other countries. This was followed by Virgin Media, which was created from the merger of NTL, Telewest and Virgin Mobile who have joined the race to offer the most competitive "quadplay" service: digital television, broadband internet access, and mobile and home telephone services.

David Doulton, Director of Fair Investment Company, the financial news and comparison website comments: "What we have seen over the past year can only be a good thing for customers as competition will inevitably drive prices down further. In fact those wanting to sign up to a quad-play service are now in the strongest position they have ever been as the cross platform media firms vie for their custom.

"This is an increasing trend amongst communications companies including Sky, O2 and Vodafone and definitely seems to signal a new era of multiple bundle deals which will see the consumer having the pick of the bunch. This is a relatively new area for us too but we have plans to develop our offerings further to make sure customers find the best possible packages on the market.”

But it isn’t just the big boys who are trying to take the lion’s share of the broadband market. The recent addition of Post Office broadband is just one example and only this week, the first ever mobile phone that offers free calls and text messages over the internet has been announced. The collaboration between web chat company Skype and Three will be the mobile service provider’s first foray into the hardware market.

The move has been followed by T-Mobile who has also edged into the broadband market with its new tariff. Customers will pay no more than £4 per day to have unlimited wireless broadband access in a number of cities in the UK and has also lowered the prices it charges for its wireless broadband contracts.

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© Fair Investment Company Ltd