Telewest throws down challenge in Net price war

Telewest Communications, the country's second largest cable company, threw down the gauntlet to British Telecom yesterday with plans to offer unmetered Internet access from £10 per month.

Telewest Communications, the country's second largest cable company, threw down the gauntlet to British Telecom yesterday with plans to offer unmetered Internet access from £10 per month.

Telewest's offer, called SurfUnlimited, will include Internet service provision using the branded Cable Internet provider. The service will be available in all Telewest franchise areas, including through the recently acquired Cable London, from Valentine's Day, 14 February.

SurfUnlimited will be available to Telewest residential telephone subscribers. They pay £9 per month for basic phone line rental and will be required to agree to spend at least £10 per month with Telewest on other telephone call charges. "SurfUnlimited will be an unbeatable Internet service that will remove the cost concern stopping many people from surfing the Net whenever they want and for as long as they want," said Tony Illsley, Telewest chief executive.

Philip Jansen, marketing director, added: "One of our desires here is to cut through all the clutter in the market. We wanted one simple offer." A recent study by Gartner Group showed that 36 per cent of adult Britons without Internet access at home cited the cost of phone call charges as their reason for not going on-line. The study also found that 88 per cent of those who have would use the Net more often if phone access was unmetered. Prime Minister Tony Blair has called for Britain to become a world leader in the Internet economy, particularly in the take-up of e-commerce services. Analysts, however, warn that Britain's system of metered phone charges impedes achieving those aims.

Telewest's intervention comes just one week after British Telecom, prodded by Oftel, the telecoms watchdog, announced an unlimited Internet access package priced at £34.99 per month. BT's offer, however, didn't include an Internet service provider (ISP), for which the telecoms giant currently charges £11.95 per month. BT charges residential subscribers £26.80 per quarter for a phone line.

Last night, the future of BT's unlimited Internet access scheme, which was to launch in the spring, appeared uncertain. Telewest's move will also hit Britain's over 300 free ISPs such as Freeserve. They earn a 15 per cent cut from what Internet users pay in metered phone line charges.

The relaunched Cable Internet ISP is Telewest's first product development with Microsoft, and it will combine a Telewest branded portal integrated on users' computer screens with the Microsoft Network. Microsoft recently completed its acquisition of a 29.9 per cent interest in the cable company.