05 April 2009

Broadband prices fall as internet providers compete for business

15 03 2009 - Broadband companies are falling over themselves to attract your business - but make sure the contract matches your requirements, says Lisa Bachelor.

Cash-strapped internet users could save more than £100 a year by switching provider, as the cost of the cheapest broadband package has fallen to below £6 a month.

Many broadband companies are keen to promote higher-speed packages, but these come at a price when plenty of householders are more interested in lowering their broadband bills.

Companies such as Plusnet, TalkTalk and 02 are targeting these households with remarkably cheap-sounding deals. A few weeks ago, Plusnet, a subsidiary of BT, launched a broadband service (one without a phone package attached) for £5.99 a month.

Unusually, householders may not even have to sacrifice the speed of their service to get a price that low. Plusnet Value customers will get speeds of up to 8Mb and a monthly usage allowance of up to 10Gb (an hour of watching iPlayer typically takes up half a gigabyte). There is no connection charge and the package includes a wireless router. "If you just want cheap broadband, you can't beat this deal at the moment," says James Parker of

There are some catches, namely that users have to commit themselves to an 18-month contract with Plusnet and that the service is only available to 80% of UK broadband customers. The remaining 20% living outside Plusnet's low-cost broadband areas can take the £5.99 broadband for three months but will have to pay £11.99 a month thereafter. Alternatively, TalkTalk has a phone calls and broadband package for £6.49 a month, but householders have to switch to the company's line rental to get the offer.

Andrew Ferguson of says that TalkTalk still scores badly on customer service surveys and recommends instead low-cost broadband from O2. "The broadband is cheap and lots of people say they are impressed with the UK call centre," he says.

The 02 broadband deal is a fixed-line service (not mobile broadband) but 02 mobile customers get the cheapest price for the internet, at £7.50 a month.

02 also topped numerous customer satisfaction surveys for broadband providers. users have just rated it top again, followed closely by BE and Plusnet.

The cheapest standalone broadband deals now nearly all require a contract commitment of at least 12 months, many asking for an 18-month or 24-month sign-up. This is not ideal if the broadband connection turns out to be poor or if you are going to move house in that time. Not all providers will allow you to move your broadband service and yet you remain liable for the rest of the contract.

The cheapest short-contract broadband deal comes from AOL, which offers a one-month contract for £4.99, rising to £9.99 after three months (again, this does not include line rental). The deal does mean you have to take AOL's phone calls package, too.

Direct Save Telecom does monthly broadband contracts for £9.95, with a £29.95 set-up fee. Namesco also has a one-month contract for £12.95 a month.

Parker says that those who have Sky TV, and plan to keep it, would be better off with a bundled package - one that includes TV, phone and broadband - from the same provider. Sky offers basic broadband for £5 a month to its TV subscribers or for free if you take its call package.


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