how can large ISPs be so cheap?

As the title. i notice that Talk Talk, sky and Bt are a lot cheaper than smaller ISps, how can they do this?

I know that they may have more customers, but to offer unlimited for a few quid more than normal seems to be impossible.

Talk Talk for instance is £25.50 for unlimited fibre, yet the ISp i am with for £25.90 it is a 30GB limit, ok it is unlimited off peak. Then there is a £100 connection fee, where Talk Talk is £30.

I have no idea what sky is charging, Bt is around £26 again unlimited and free connection.

granted that sky and Talk Talk uses their own LLu system, but it still comes over the Bt fibre, so they still have to Pay Bt wholesale. How Bt retail can do the higher speed for the same price as the lower speed I don't know, i suppose it helps when you are all one company.

Never believe that rubbish about BT departments not being connected.


We are going back to the old days, where smaller ISPs will be forced out because they can't compete.

Even if i did go for fibre, there is no way i would pay a £100 connection fee, no offence ADSL24, but that is over priced, i would have to go for one of the larger providers and then there is only one I would go for and that would not be a great choice either.

Thankfully at the moment i am happy with what I got and will not be going fibre when it comes here around the end of next month, but I know a few people who are thinking of it and some of them are with the smaller ISPs and will go to Sky, Bt and even Talk Talk because they are cheaper.

Two things:

Traffic Management
Customer Service

TalkTalk & BT employ unskilled, offshore call centre staff.

Small (pricey) ISPs employ reasonably bright british people.

TalkTalk & BT Traffic Manage their networks which means during peak times HTTP should remain nice and fast but other types of traffic like Peer to Peer might slow down depending on network traffic especially in the evening.

Small, pricey ISPs have enough bandwidth and stringent enough usage limits to no have to traffic manage.

Edited by izools (Mon 21-May-12 20:49:17)

I agree it does knock the smaller ISPs out of the market
I'm interested in seeing the reasoning for pricing myself too...

I believe that PLENTY of people are living the what I call 'small isp myth.' They believe their ISP is offering them something far better than they would get elsewhere and hence they justify the high prices. I have definitely experienced this myself in the past. The reality is that the big ISPs are far cheaper and often just as good in terms of connection speed, throughput etc.

I'm going to watch this thread closely anyway

TalkTalk subsidises via the phone calls most people make, e.g. voting on X-factor and similar for Sky with TV and BT with it requiring calls.

Hence the emphasis on ARPU in their financial reports

Small ISP's definitely tend to have the edge on the customer service front from my experience but of course you have to pay for that at some point so its up to each individual whether its worthwhile or not.

I don't think that customer service is the only thing that contributes towards the difference in price though.

The economies of scale will be a large contributing factor to the cheaper prices that the large ISP's can offer. Whether you have one customer or one million customers there's certain costs to doing business and when you can spread those costs across more customers the cost per person is generally less.

I did the small ISP thing for many years but swapped to BT Infinity earlier this year for the cost saving and have been very impressed with them since swapping to them.

Yup the customer service is definitely very random, sometimes you can end up with a decent person other times you may as well be talking to a wet cloth but overall the quality of what has been provided (customer service aside) has been top notch.

In reply to a post by MrSaffron:

TalkTalk subsidises via the phone calls most people make, e.g. voting on X-factor and similar for Sky with TV and BT with it requiring calls.

Hence the emphasis on ARPU in their financial reports

Mmm, that is true.

Not that I agree with it, certainly with Bt, they should not be allowed to force people taking their calls package as well.

In reply to a post by Dilbert:

Small ISP's definitely tend to have the edge on the customer service front from my experience but of course you have to pay for that at some point so its up to each individual whether its worthwhile or not.

I don't think that customer service is the only thing that contributes towards the difference in price though.

The economies of scale will be a large contributing factor to the cheaper prices that the large ISP's can offer. Whether you have one customer or one million customers there's certain costs to doing business and when you can spread those costs across more customers the cost per person is generally less.

I did the small ISP thing for many years but swapped to BT Infinity earlier this year for the cost saving and have been very impressed with them since swapping to them.

Yup the customer service is definitely very random, sometimes you can end up with a decent person other times you may as well be talking to a wet cloth but overall the quality of what has been provided (customer service aside) has been top notch.

TBH, I don't want to touch BT again, even the thought of using their fibre network puts me off. With the problems i had with Bt with ADSL, I want to stay as far away as possible.

If the service works ok then there should be no need to use customer services, I been with ADSL24 for 2 years now, give a day or two and only once had to get in contact about a problem.

I fear for the smaller ISPs to be honest once fibre covers most of the country, people will go for the cheapest option, it don't matter if it any good or not. that have been proved by the amount of people that have gone for Talk Talk, not because of quality, but because of price.

the other thing that bothers me is how long will it be for people are forced onto fibre even if they don't want it? I know I won't be because the price difference unless cable and wireless gets sold and their new owners decide to dump the re-sellers.

i pay just under £20 a month for my broadband which to be honest is pretty good, sure the speed is not great, but that have nothing to with my ISp, I blame Bt for that, because they cut costs when they put the new exchange in. for this £20 a month I get unlimited internet, no traffic management and no profiling.

If I wanted to stay with my provider and go for fibre, i would be paying more for less if you know what I mean.

It is all geared up to benefit BT at the end of the day.

granted that sky and Talk Talk uses their own LLu system, but it still comes over the Bt fibre, so they still have to Pay Bt wholesale.

Nope.

VULA/GEA, completely avoiding BT Wholesale and its prices/markup. Effectively the same as LLU. On both LLU and GEA they pay Openreach for the connection between you and the exchange, and on top of that for FTTC they pay Openreach for that between you and the exchange.

BT Wholesale also pay Openreach for those services.

I have used TalkTalk Business ADSL2+ for the last 2 years - I paid £22 /month plus VAT for phone and unlimited broadband. Their business customer service is on shore, knowledgeable and helpful. You also get prioritised bandwidth over residential users so all in all it is a good value package.

My cabinet is in the final stages of being upgraded for FTTC and has an RFS of end June. Unfortunately TT Business are not offering a fibre product at the moment so I have been forced to move to another supplier else I would have stayed with them (they have lost a happy customer).

I will be going to BT for the simple reason that they do offer an unlimited package. I am approx 6.5km from the exchange and with ADSL2 get just over 1Mb. At about 600m from the cabinet I have an estimated 50Mb. So whatever happens I should get a vastly improved service over what I am used to. I currently have to have 2 lines so I will be able to cease 1 line and still pay less than I do currently.

I would have been happy to go with a smaller ISP but the relatively small download limits put me off. I don't use peer to peer but we do use Netflix which is very bandwidth hungry. I work from home and even on our lousy 1Mb connection I have seen our combined data usage rise from c12 to c60GB/month. That is without HD so smaller services with 30-40GB of data allowance is simply not enough. Business grade packages which offer c100GB are twice the price of BT.

With more Netflix/Lovefilm data hungry services arriving there needs to be big step up in bandwidth allowances to allow the smaller ISP's to compete, which probably means a drop in wholesale data prices.

I don't get it either, Fibre has just started at my local exchange so I spent some time checking what packages were on offer.
I usually try to avoid the larger ISP's and find a small UK based ISP who wont mess about with my connection and offer either an unlimited connection or a larger allowance.
However this time I appear stuck, the difference between the big and small ISP's is night and day. 90gig for £50 a month @ 40/10 vs Unlimited (with peak time throttling) for £26/mnth @ 80/20

Im usually willing to pay a bit more for the better service and to avoid the big ISP's but i don't think I can justify it this time.