DON'T BELIEVE THE HYPE: BROADBAND BRITAIN STILL PUNCHING BELOW ITS WEIGHT

UK broadband service providers are in danger of driving away customers unless they display a greater level of commitment to consumer price, performance and technology concerns. 93% of IT professionals questioned for the report consider subscription charges to be a potential major obstacle to broadband uptake. Almost 60% of those polled claimed that they could quite easily image life online without broadband.

Broadband internet users feel short-changed by the level of service provision currently on offer according to a report to be published in November by Berlin based market research firm Metrinomics. Releasing the preliminary findings of their Broadband Internet Access report, the German market tracker says that broadband service providers are in danger of driving away customers unless they display a greater level of commitment to consumer price, performance and technology concerns. 93% of those questioned for the report consider subscription charges to be a potential major obstacle to broadband uptake. More worrying still for broadband providers, almost 60% of those polled claimed that they could quite easily image life online without broadband.

The report - based on a global survey of more than 1100 IT professionals - also reveals that consumers are less interested in content offers than they are in cheap installation: 70% claim that content provision is unimportant, while 83% considered current installation costs to be a significant barrier to broadband adoption. The ongoing access versus content debate has taken a further twist with BT?s recent unveiling of its controversial access only BT Broadband package which poses a direct threat to the core business of conventional ISPs like AOL and Freenet who are pinning their UK broadband hopes on exclusive content provision.

The British broadband market has been revitalised by Oftel initiated BT wholesale price cuts which have subsequently forced prices down across the board by around 40% to the current 30 per month glass ceiling. Although the UK was able to recently boast its one millionth broadband customer, delays in rolling out broadband in the UK mean that Britain still has some considerable way to go before it actually catches up with European rivals France and Germany. BT's near monopolisation of the market and telecoms watchdog Oftel's apparent reluctance to pressurise BT to further unbundle the local loop means that Britain also remains behind countries like America, Canada and South Korea.
Availability has failed to meet consumer expectations, leaving many potential customers out in the cold. British government spend of 30 millions pound sterling for regional access pales in signficance when one considers the state level of investment of countries like France (200 million on infrastructure and 1.4 billion in loans) and Sweden (1 billion on network). As one study participant put it, 'I live five miles from Reading - the IT centre of the UK - and I cannot get broadband. I am incensed at this ridiculous situation.'

Frustration at lack of affordable, available broadband was a recurring theme amongst UK respondents:

'Cost of Satellite is ridiculous for home use. BT haven't enabled my exchange yet so availability is the major obstacle.'

'None available at present. BT are tardy with broadband provision in the UK & my exchange may never be enabled.'

Announcing the report findings, Metrinomics Research Projects Manager Matt Slater said:

'Most people want broadband: 60% of non-broadband subscribers intend to subscribe to a residential broadband service within the next 12 months, but the perception is that for too long broadband has been punching below its weight. There is no question that BT's broadband about-face and the recent spate of price cuts have jolted a market which was withering on the vine. Rival broadband providers like Freeserve and Virgin have now grasped the nettle of price competitiveness - despite ongoing grievances against BT - but it is worth remembering that BT only launched its DSL broadband service in September 2000: a full year after market leaders like Germany's Deutsche Telekom. This was also a year after the creation of the Office of the e-Envoy which set the faintly risible target of making the UK the most extensive and competitive broadband market in the G7 by 2005.'

Although 60% of non-broadband subscribers indicated that they would most probably subscribe to a broadband service within the next 12 months, less than 10% considered cable modem and DSL access to be their preferred broadband access technology of choice. Almost 90% of respondents depend on these cable and telephony legacy technologies for broadband access, a situation which Slater believes shows a lack of vision on the part of broadband providers. Wish-list technologies like fibre-to-the- home and T1/T3 score less than 5% for residential availability. Four in ten UK households are still not served by DSL connections; making the UK the slowest of all of the major developed economies to develop broadband.