ISPs must adapt or die!

ISPs must shift with the fast-evolving Internet landscape or die. This is the message from some smaller ISPs following the news that BSkyB has joined the free Net frenzy with a novel free hardware deal.

The satellite broadcaster has packaged what some believes is an ingenious deal -- kit worth £200, free Web access, cheap online calls and standard telephony 40 percent cheaper than BT's -- but others claim is the death knell for ISPs and customers.

"It forces the evolution of the net and is changing the face of the industry, If ISPs can't anticipate and shift quickly enough then they don't deserve to stay," said Clifton Flack, marketing manager of Cerbernet.

"It will create different types of ISP, focusing on specialised areas such as content, IP telephony and TV over the Net," Flack added.

But others fear the thriving online market could be reduced to a single stall comprising a handful of major media conglomerates flogging advertising space.

Zak Bukhari, managing director of London-based Purplenet Internet, said: "Smaller players will be killed off. Just like BT, BSkyB is swamping the market. Everything will become free and if there's nothing in it for smaller ISPs other than advertising, they'll leave the market," said Bukhari.

Bukhari argued that market dynamics had changed so rapidly, that few had had time to react. "So much has happened in this market, we're almost numb to it. We always knew the big players would one day dominate, but no-one expected it this fast."

There was also concern that smaller fish stood no chance pitted against marketing-savvy giants. "Large players are using the Net as a marketing tool to sell other services rather than being a serious Internet provider. BSkyB's deal is targeted at consumers. If it goes for businesses, I'll be really worried," said Chris Jarvis, managing director of PlugIn.co.uk.

But Jarvis pointed out the deal could have a positive effect on Net uptake. "Driving up consumer Web use will push more people and businesses to adopt it," he said.

Some refused to become embroiled in the debate at all. Manchester ISP TimeWarp simply replied: "No comment."

While telecoms watchdog Oftel is powerless to intervene with the "dynamics of the market", ISPA secretary general Nicholas Lansman fears that the aggressive price-cutting bodes ill for the UK Internet industry and consumers in the long term. "The Net industry is poised to be very important in the history of communication but if larger companies bundle services it could potentially force smaller ISPs out of business," he said.

ISPs should contact Oftel directly with any complaints about the deal.