Big ISPs slow to market with self-install

Large internet service providers are stalling over the introduction of 'wires-only' DIY broadband, even though smaller companies have rushed to make their offers.

DIY broadband allows users to buy high-speed internet access more cheaply by installing the equipment in their own homes and saving the cost of an engineer's visit.

BTopenworld is planning to launch the service, but couldn't tell us when or how it will be priced.

A Freeserve spokeswoman said that the group's experiences in France, where self-install DSL is "flying off the shelves", made them optimistic for the same product in the UK, but that it is still too expensive.

She said: "We were very disappointed with the wholesale price of £25. We've always seen £30 as the target DSL price, and a wholesale price of £25 doesn't give us any margin.

"We will take a view on marketing DIY broadband based on how the wholesale market moves. We won't be marketing it heavily if the wholesale price stays where it is."

An AOL spokesman echoed these sentiments, saying that the company will not be spending money on marketing broadband while prices remain high. There is no date for a commercial launch but trials are "going well".

Tiscali UK chief Sergio Cellini also said that in the UK prices are still too high and the company has no plans for an imminent launch, though the product was working well in other European markets, such as Germany.

In the meantime, smaller ISPs are rushing a string of impressive self-install offers onto the market place. Eclipse is offering self-install with 5 static IP addresses for £33 per month - An offer so cheap they must be making a loss, the Freeserve spokeswoman claimed. Zen Internet, PlusNet, Freedom2Surf and others have also put offers on the market. The cheapest engineer-installed broadband is currently £39.99.

However, until the big ISPs put some effort behind it, there is little chance the market price will drop - a classic Catch 22.

A BT spokeswoman said: "We can't just drop the price because every time we do we get investigated by OFTEL. We aren't allowed to cross-subsidise our products, so we have to charge the customer what it costs us to provide it."

"When we have more customers, then our costs will come down and we might be able to cut our prices."

AOL's spokesman said that it was for BT cut prices first before anything could happen. "There has to be a cut in the retail price first. It's sub-economic to offer mass market broadband at the moment - that's why no-one is doing it."