BT launches £33m advertising blitz to boost numbers of high-speed Net users

Telecoms giant aims to trounce rivals with 5 million customers on broadband by 2006
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The Independent Online

THE BATTLE for broadband Britain intensified yesterday after the telecoms giant BT unveiled a £33m advertising campaign in an attempt to increase awareness of high-speed internet access and to encourage customers to buy its products.

The battle for broadband Britain intensified yesterday after the telecoms giant BT unveiled a £33m advertising campaign in an attempt to increase awareness of high-speed internet access and to encourage customers to buy its products.

The company's initial £10m 10-day long "Broadband has landed" promotion, launched yesterday by Nell McAndrew and Christine Hamilton, who starred in the hit TV show I'm A Celebrity ... Get Me Out Of Here!, hits the screens on Sunday.

Jarvis Cocker from the band Pulp, two pig characters called Smokey and Streaky, a rhinoceros, a three-headed dragon and a Mongolian horse woman are among the stars of the no-expenses-spared campaign.

The advertising, BT promises, will be almost impossible to miss. And if that isn't enough, BT is following the promotion up with an extra £23m campaign next month designed to promote its access-only no frills BT Broadband product.

Pierre Danon, the chief executive of BT Retail, said: "The sheer scale of what we are doing should leave no one in any doubt of the seriousness of our intent to put broadband at the heart of BT and be the flag-bearer for the industry in the Government's drive to make Broadband Britain a reality."

The sheer amount of money that BT is throwing at the promotion, estimated to be about 15 per cent of BT Retail's annual advertising budget, backs that up.

And BT knows only too well that it cannot afford to mess this up. After its annus horribilis last year, which saw the company launch a rescue £5.9bn rights issue to cut its then £30bn debt pile as well as undergo a dramatic restructuring, it still has much to prove.

Perhaps the biggest single hurdle BT faces is proving it can grow revenues from its customer base because its core residential business remains under extreme pressure from the likes of mobile phone operators and cable companies. That is why it has settled on broadband.

"Our core residential business in the UK has been under huge competitive pressure for the last three or four years," said Angus Porter, managing director of BT Retail's consumer division.

"If we are ever to get back into the City's good books what we have to do is have a really compelling growth story and broadband is right at the heart of all the initiatives that mean we can grow our UK residential business again," he said.

BT's grand broadband plan is not new. Ben Verwaayen, who joined BT as chief executive earlier this year, sketched out his new vision for the company in April. He said then that broadband was at the heart of the operation and that he was targeting having 5 million broadband customers by 2006. Reassuringly, that is still the plan.

The company said yesterday that it hoped the advertising noise would help it double the number of broadband connections it is making a week to 24,000 from 12,000. That, it said, would easily ensure it hit its target of getting 1 million users by summer next year and would put it well on track to meet its target of 2 million users by 2004.

While those targets sound ambitious, they do not seem unrealistic. The UK telecoms regulator Oftel said the number of broadband users in the UK has more than doubled since the end of last year. At the end of June, Oftel estimates there were 709,000 broadband users in the UK, up from 300,000 in December and compared with 150,000 in June of last year.

"When you consider we have not yet done a scrap of advertising for BT Broadband, the number of customers already signing up is excellent, giving us solid confidence that we will reach the target we have set for next year," Mr Porter said.

BT, which has in the order of 350,000 broadband users and took 1,700 orders for its BT Broadband product last week, reckons its advertising campaign will bear fruit almostinstantly. It is also confident of having positive news to share on that front in November and predicts its broadband strategy will raise new revenue of £681m a year by 2004/05.

With so much at stake, the company is, understandably, taking no chances and will also aggressively push its broadband product on to the high street. The mobile phone store Carphone Warehouse will be selling the BT Broadband product in four or five stores on a trial basis from the middle of next month. Other partnerships, including another high street deal as well as an agreement with Sky, are also in the offing.

But BT is clearly not the only company to have spotted the opportunity. The cable companies NTL and Telewest, despite their respective financial problems, are both still extremely aggressive in the market as are a host of rival telecoms operators.

While Bill Allan, chief executive of the telecoms group Thus, yesterday welcomed BT's marketing campaign, he took the opportunity to urge consumers to shop around for the best deal. "A £33m campaign designed to kick start the broadband market is likely to benefit all operators offering ADSL services, but it's important that consumers ensure they are getting value for money," he said.

And BT's broadband push has not been without its hitches. A quick glance at the website details just a few of the horror stories that users have experienced in getting broadband from BT.

"I have only been on [the service] a couple of days but am totally dissatisfied. My online gaming has become non-playable. I want to get rid of this piece of junk at the earliest opportunity," complained one.

"I am brassed off and I am refusing to pay a penny. Since July I have had nothing but hassle," another said, adding: "I hope they cut me off and then I will go NTL or whoever."

In its defence, BT points out that the bulk of its BT Broadband customers are happy. "Satisfaction with various aspects of BT Broadband has been running at an average of 90 per cent, with customers being particularly happy about the speed of the product, as well as the one-stop service ... and the consolidated bill," the company said.

In addition, while BT is adamant that the demand for broadband exists, it readily admits there is still a lot of work to do to get consumers excited about high-speed internet access in general and what it can offer.

"To be honest, it is going to be a gradual process. There is no one silver bullet. It's not like Sky who were able to get to 5 million homes through Premier League football," Mr Porter said.

But for all those problems and despite the fact that BT is clearly not splashing out on advertising broadband for altruistic reasons, the knock-on effect the £33m campaign will have on the industry is still positive.

Chris Godsmark, an analyst at Investec, said: "The campaign will boost the overall UK broadband market and is therefore good for other operators including Thus."

Given the slow start the UK has got off to in getting broadband-enabled in general, this renewed broadband push by BT can only be a good thing.