Is there a future for BT's unmetered plans?

Unmetered narrowband access for £34.99 is too much say experts and according to Oftel, BT has yet to notify the watchdog of its plans. Jane Wakefield reports

Confusion hung over BT's unmetered Internet service, Surftime, Thursday. BT claims Surftime is going through an approval process but the telecoms watchdog Oftel says it has yet to receive any notification from the telco.

The news comes amid mounting doubts that Surftime -- due this spring -- will be widely adopted. Significantly, a recent client survey (not released to the press) by research firm Gartner Group revealed that users are not prepared to pay £35 per month for broadband access, leaving experts questioning who will take up BT's £34.99 unlimited narrowband service.

Gartner's research questioned 1000 Internet users on whether £35 was a reasonable figure for unlimited broadband access. The majority said no.

Senior Gartner Group analyst Adam Daum believes the results do not bode well for Surftime in its current guise. "If people are reluctant to pay a premium for broadband they won't pay it for narrowband," he says. Daum thinks BT has set the price high for a reason. "It is a deliberate ploy on BT's part to appeal to only around 10 percent of users. That allows them to learn about how people use the Internet when the pay per minute charge is dropped," he says.

BT admits it is being cautious about rollout. "The last thing we want is everyone on the Internet all day long. That could have dire consequences for the emergency services. We have to be wary," he said.

According to Daum, BT will lower costs eventually, but in its own time so it can extract maximum profit and PR from the unmetered bandwagon. "BT knows that at a certain point, access will cost half what it does today. If they introduce it overnight they don't know whether it will have a positive effect on profits in the short term." Daum adds: "BT introduced voice call rates at a piecemeal rate in order to extract the maximum PR value. It will milk the greatest PR value from Surftime."

But BT's PR effort may well be upstaged by one of BT's most cunning opponents: cable company Telewest is due to launch unlimited Internet access for £10 a month in February. Telewest currently has 1.6 million customers, with the capacity to connect 4.4 million households in London, the South East, Bristol and the Midlands.

Asked how Telewest can afford to offer unlimited access for £10 a month, a spokesman says, "We keep our costs to a minimum. It helps that we don't have to pay another phone company interconnect charges."

So why can't BT do the same? "I can't think of a good reason why they can't," he says. BT claims its hands are tied by Oftel. "We wouldn't be allowed to offer a service at £10. It might be seen as anti-competitive," a BT spokesman told ZDNet News.

Telewest believes the UK access market is currently far too complicated for most consumers. "There are too many discount schemes around and people are confused by it. That confusion only goes to serve BTs interest," the spokesman says.

Gartner Group survey on unmetered broadband Internet access revealed:

  • 81 percent of the 1000 questioned said too expensive

  • Only 4 percent said it was good value

  • At £15 -- , 50 percent said it would be good value

  • 24 percent said £15 was still too expensive

Surftime, which is a narrowband unmetered access service, will be offered to the consumer for £34.99. Is the cost too high? Please tell the Mailroom. ZDNet will publish your comments next week in the Mailroom. We will also publish an article discussing your comments and suggestions.