Texnet, a new UK Internet provider, claims to be offering dial-up Internet service at 2 pounds (3 ecu) per month. This is 20% of the generally accepted floor price of 10 pounds (13 ecus) per month for Internet access.
This offer has generated great debate. Some commentators felt at first that it was an "April fool" story, but it seems to be genuine.
Closer analysis reveals some limitations in the offer, including the need for users to provide their own Internet access software (not a great problem) and the use of a single UK-wide number for access, leading to national call charges. However, this national access cost is likely to be reduced by using competitive access providers such as Energis, and even with BT, the weekend national rates are quite low. However, several commentators feel that Texnet have an agenda other than commercial pricing, or else patient backers with very deep pockets.
In fact, by shopping around, Internet service at around 5 pounds per month is already available in the UK from niche Internet providers.
Our analysis: In many European countries, the price of Internet access is 10 times or more higher than the economic cost. The UK with its over 50 Internet suppliers shows what happens when a highly deregulated market starts to bite into established services. Charges such as 2 pounds per month may strike fear into most PTT circles around continental Europe, but are clearly the shape of things to come, whether or not AT&T with their integrated telephony/Internet ideas actually make good their announcement of setting up on European shores.
A future edition will cover the issues around many UK Internet providers offering free access to schools and the recent announcement that BT the leading telecom provider offering an annual fixed rate for local telephone access.