Lixxus, a new entrant to the UK telecoms market, launched a broadband service this week that only charges users for the bandwidth they use.
Unlike other broadband services, the 512Kbps Lixxus product does not include a monthly subscription. Instead, the company charges by the amount of data downloaded, a tariff structure that should benefit light users who only download 1GB of data or less a month.
Customers are charged 5p + VAT per megabyte for the first 300MB. Above this £15 point, they are charged 0.225p + VAT for each additional megabyte, up to a maximum bill of £25 + VAT (£29 including VAT) per month.
A retail price of £29 per month puts Lixxus' product at the top end of the UK market, where unlimited access consumer broadband packages currently cost around £25 per month.
According to Joe Kelly, managing director of Lixxus, the package offers real value for those who want to use broadband intermittently or irregularly.
"We're offering entry level customers a value for money product, and one where they can still do a lot online for £29 a month," said Kelly.
"We’re not saying we are the cheapest in town, but we are giving people the option to not use their connection much in one month, and download a lot in the next month and pay more."
Kelly also claims that Lixxus works out slightly cheaper than BT's entry-level broadband package, which lets users download 1GB a month for £19.99.
Lixxus' tariff structure means that someone downloading 1GB a month would be billed £15 + VAT for the first 300MB and £1.58 + VAT for the next 700MB -- equal to around £19.50 a month.
Kelly also said that Lixxus would launch a business-grade product in the next couple of weeks. The company has yet to release any details on its plans for a business product, but Kelly said that it would use the same bandwidth-charging mechanism as this consumer product but would also probably have a set monthly fee.
Several other Internet service providers are moving towards billing customers for the bandwidth they consume. BT Wholesale recently changed the way it sells bandwidth to ISPs, making it easier for them to offer pay-as-you-go pricing, or to let users turn up the speed of their broadband connection.
PlusNet and Eclipse have already announced products that take advantage of these options, but Lixxus is thought to be the first UK broadband ISP to have no fixed monthly fee.