Broadband ISPs get £1m bonanza from BT

BT will award well over £1m to selected British Internet service providers this week, in an attempt to give a further boost to the take-up of broadband in the UK.

The money will be used to finance new advertising campaigns for high-speed Internet access services based on BT's ADSL product.

BT said yesterday that it had recently invited ISPs to submit proposals for innovative broadband marketing campaigns. The five ISPs that submit the best ideas will each receive £200,000, and an unspecified number of other ISPs will receive £50,000 each to help finance their advertising.

ZDNet UK understands that a large number of ISPs have applied for these grants, including some of the UK's largest ISPs. The winners, whose identity could be revealed in the next few days, will be chosen by an independent panel of judges, including a representative from the Institute of Marketing.

Bruce Stanford, BT's director of broadband, said that this new marketing scheme was the next step in BT's attempt to drive broadband take-up in the UK, and could even be used in conjunction with BT's Web-based broadband registration scheme.

"ISPs will even be able to use the money to advertise broadband in an area where the local exchanges are not yet ADSL-enabled," Stanford said, adding that if ISPs proved there was sufficient demand for high-speed Internet services in an area without broadband, BT would ADSL-enable the local exchange.

As part of its Web-based broadband registration scheme, BT has set "trigger levels" of interest for exchanges without ADSL. Once these trigger levels are reached, BT will upgrade the exchange.

This is the second time this year that BT has helped to pay for the advertising activities of ISPs that resell its range of ADSL services. As ZDNet UK first reported, BT Wholesale said back in January that it was giving money to ISPs to help them advertise their broadband products. At the time there was little broadband marketing activity taking place, especially by small ISPs.

A total of 41 marketing grants were awarded then, which paid for 30 press advertising campaigns, five online campaigns, seven radio campaigns and 35 direct mail campaigns.

Many of these campaigns have recently finished, and according to both BT and the ISPs concerned this initiative was a big success.

Stanford said that this first campaign -- along with the launch of a DIY broadband product and recent substantial wholesale broadband price cuts -- has helped to stimulate Britain's broadband marketplace.

"By mid-July this year, 13 percent of all new broadband installations were specifically stimulated by the campaigns that service providers ran under the marketing campaign," Stanford said.

Many ISPs, such as Colt and Nildram, have also said that the campaigns they ran were successful. Nildram increased its order rate by 250 percent and Colt achieved 2000 "very warm" sales leads as a result of their campaigns.

Other ISPs, though, were hampered by the fact that less than 70 percent of UK homes and businesses are connected to broadband-enabled exchanges, which meant that some potential customers were disappointed to find that they can't get ADSL-based broadband.

"Many people have contacted us in anticipation of receiving the benefits of an ADSL connection only to be thoroughly frustrated and disappointed when informed that their exchange is not available," reported Frontier Internet Services, an ISP based in Wales.

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