David Prosser: Free broadband may still cost you
Saturday 15 April 2006
However much Carphone Warehouse is paying its PR advisers, it's not enough. The company's official launch of free broadband on Monday - The Independent broke the story last month - was greeted with such messianic fervour that Carphone's TalkTalk website collapsed under the volume of enquiries, while its call centres were swamped.
Far be it from me to dampen the enthusiasm of the country's internet users, but there are some issues to consider before you join the rush to TalkTalk. I'm not saying its offer is poor value - around £21 a month for broadband and a decent home phone package is hugely competitive - but there is some important smallprint everyone should be reading carefully.
The biggest issue is that customers have to sign up to an 18-month contract, half as long again as almost every other broadband deal. If you cancel early, there are substantial penalty fees to pay, possibly as much as all the charges that would have been payable over the whole contract.
That's important because independent analysts believe this package will provoke a price war. Even before the TalkTalk announcement, the conditions were ripe for such a battle - and many of the leading players have deeper pockets than Carphone.
Sky, for example, is set to launch a broadband service this summer, while the recent tie-up between Virgin and NTL paves the way for what Sir Richard Branson - in his usual prudish manner - has described as "four-play". Customers will be able to buy home phone, mobile phone, broadband and television services from one supplier.
Then there's BT, which is increasingly desperate to repel the invasion of its key markets. Regulatory changes announced earlier this year will soon enable the former state-owned telecoms monopoly to offer much more competitive prices than today.
In that context, should internet users be tying themselves into a deal for the next 18 months? Carphone has got in first with an extremely generous offer, but it may not be the cheapest deal on the market by the end of the year.
It's also worth considering that price for a moment. I'm always sceptical about "free" offers that require you to pay for something else. In this case, there isn't a cheaper deal than the TalkTalk offer if you buy broadband and a home phone service separately, even from the cheapest suppliers, so Carphone is entitled to crow. But its comparisons with BT's standard products - which are more than twice as expensive - are a little disingenuous, because there are far better deals available from smaller players.
One other word of warning. The TalkTalk deal offers faster internet access than many other broadband deals. But the full-speed 8mb service will only be available to people whose local telephone exchanges have been equipped with the latest technology and for now at least, these are few and far between.
All in all, there's no doubt Carphone deserves enormous credit for this excellent new initiative. But it may just be worth sitting on your hands to see if something better emerges.
n n n As a regular cyclist who has just had three bikes pinched from a locked garage, I wasn't surprised by a warning from Halifax General Insurance this week that cycle theft is up 10 per cent on five years ago. But what has taken me aback - call me naive - is the difficulty many cyclists have claiming on their home insurance.
The vast majority of home contents policies do not cover bikes unless they're actually stolen from your home. And even where you pay a premium to get bike cover, the exclusions and limits on claims are numerous.
My advice is to take out specialist bike cover, rather than relying on your home insurer. I'd suggest starting by consulting the excellent cycling group, the CTC ( www.ctc.org.uk).
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