BT is launching its next-generation super-fast broadband service next week with a claim to have undercut Virgin Media’s prices, sparking a war of words with its bitter rival.
The next generation of super-fast internet connections are more than five times faster than the basic 8Mb connections enjoyed by most people today and enable whole music albums to be downloaded in seconds and HD movies in just a few minutes.
BT is spending £1.5bn putting a new fibre network within the reach of 10m homes by the time of the Olympics in 2012. It will have 500,000 homes connected by the end of next month and 4m by the end of this year. Virgin Media, meanwhile, has already upgraded its existing cable network, which passes 12.5m addresses, and launched its own ultra-high speed offering.
From 25 January, BT will start selling its super-fast broadband service, called BT Infinity, to customers who have already had their lines upgraded, starting at £19.99 a month plus £11.54 line rental. That is less than the basic £28 a month – plus £11 line rental – charged by Virgin Media.
The cable firm, however, hit back at BT’s pricing, accusing the company of misleading consumers because Virgin Media’s service is actually faster. BT’s service runs at 40Mb per second while Virgin Media’s is 50Mb per second.
“We’re not sure why people in the UK would want to wait for BT’s 40Mb service which hasn’t launched yet, when they can already get Virgin Media’s great value 50Mb service,” said a spokeswoman. “Last summer we completed the roll-out of our next-generation service to 12.5m homes and people throughout the country are already enjoying all the fantastic things you can do online with the UK’s fastest broadband service.”
Virgin Media also pointed out that the £19.99 basic version of BT Infinity comes with a 20GB a month usage cap. That is lower than the fair usage policy of many residential broadband providers offering services at much lower speeds – who typically restrict users to downloading no more than 40GB a month. It could also seriously impinge on broadband users as 20GB is only about 50 hours of on-demand television while a single HD movie is about 5GB. Virgin Media does not have a monthly usage cap on its 50Mb service.
But the head of BT’s consumer business, John Petter, responded that super-fast broadband is not just for people who download a lot of data – such as computer game players or film fans – it will also appeal to people who just want to continue to use the web as they do now, but have much faster access. “There will be a group of customers out there who just want their existing broadband usage to be seamless,” he said.
BT has removed its monthly usage cap for people willing to pay £24.99 a month for super-fast broadband. Customers on this version of BT Infinity will also benefit from upload speeds of 10Mb a second – meaning they will be able to send large files to other people quickly. In stark contrast, Virgin Media’s upload speed – even on its 50Mb service – is 1.5Mb, though it is currently testing 10Mb.
Petter refused to give any prediction for how many people the company expects to sign up to its super-fast service but stressed “we expect this to be extremely successful”.
BT Infinity currently relies upon Fibre to the Cabinet (FTTC) technology – essentially running a new fibreoptic network to the green roadside cabinets that dot the country and then using traditional copper lines to connect individual houses. But BT is also testing fibre to the premise (FTTP) technology which is capable of speeds of more than 100Mb. BT reckons 75% of its target of 10m homes and businesses by mid 2012 will use FTTC, with the remaining 25% having access through FTTP