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Industry says ISPs must adapt or die

Following this week's story on the imminent arrival of permanent high speed Internet links to the consumer market, ZDNet News asked how traditional ISPs will cope and how the customer will benefit.
Written by Munir Kotadia, Contributor and  Richard Barry, Contributor

David Clarke, managing director Virgin.Net

"The average bill for a Virgin.Net customer is about £20/month (compared with @Home's estimate of between £30 - £40/month) and that includes telephone costs and I'd expect that to be around the same price for most other services. Obviously heavy users will benefit but I'm not sure @Home will want heavy users because, in large numbers, they'll slow the service down.

"Having said that, the @Home proposition does look attractive and I think it will certainly have an effect in the traditional ISP. I expect you'll see ISPs moving toward ‘wrap-in' costs (where telephone charges are included in the bill). You'll also see basic ISPs - those who do not provide online content - going to telcos to get better deals for their customers. It's all good news. Any competition is good news but basic ISPs will have to adapt."

Alan Stevens, editor of UK ISP Which Online

"From the point of view of the customer, its another method of getting online with regulated costs so more people will be on the Internet. From our point of view people use us as an ISP and a content provider. If more people can access the Web site, its a good thing."

Jonathan Robinson, managing director of UK ISP Net Benefit

One of the biggest criticisms of the Internet is of course that it is so slow. This announcement shows the problem is being addressed.

But everyone predicts the imminent downfall of traditional ISPs and I don't think that's going to happen. They'll have to adapt, that's obvious. Maybe they'll licence the [cable] technology but if it does go that way you may find people will have to pay per bit of data used. Particularly if demand is great.

It's the same old story really, adapt or die. ISPs will have to adapt. They can't compete against 1 or 2Mbit/s services with 33kbit/s offerings. Dial-up is going to face some real challenges sooner or later.

Roy Bliss, managing director of Demon Internet

Yes it's important but there's enough space in the market and we welcome the news. It certainly is something that we will be looking at with Scottish Telecom.

Undoubtedly ISPs are going to have to adapt or die but for us [Demon] we've always been at the forefront of technology. We have plenty of scope.

Is it good for the consumer? Undoubtedly, it means more people can get on the Internet, it's great news.

Kate Delhagen, senior analyst at Forrester Research in the U.S.

@Home has marketed very aggressively in the US and has seen early success. I absolutely expect this to happen in the UK, possibly even faster.

We have seen customers sign up pretty fast in the US and although I haven't heard of the cable company, It must already be supplying customers with monthly bills and should find it easy to recruit new customers.

I would expect a five to ten percent take-up rate within two or three quarters.

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