Content, not cost, will determine which broadband providers end up winners, according to IT analyst Gartner.
Despite Tiscali's announcement of a £19.99 a month broadband service earlier this month, which is a 12-month contract and offers customers 256Kbps download speeds, Gartner believes this price war will be short lived.
Anyone who remembers the early days of dialup connection will recall how many ISPs foundered as they competed to offer ever cheaper, or even free, services to customers. But Gartner believes this will not be repeated in the broadband arena. "The price war will likely not last long or determine which ISPs become broadband leaders," says a report by Gartner's Michal Halama and Susan Richardson.
They believe that smaller ISPs, without the extensive network assets of Tiscali, will not be able to compete on price but will have to use "content, applications and customer care to justify any price difference", says the report, entitled Services will shape the UK broadband market.
We are already beginning to see smaller ISPs targeting specific sectors of the market — for instance, RedDSL, which launched on 7 October, is aiming its service at online gamers as well as the traditional home and small business market.
The company, which offers services from £29.99 per month, has teamed up with games publishers and hardware manufacturers to offer gamers monthly promotions and incentives. Partners include Thrustmaster; Hercules; Novalogic and JoWood Productions. The aim is to cash in on the anticipated boom in online gaming.
"Online gaming is set to explode, according to research. Trends also indicate that in the next 12 months over 700,000 homes are likely to upgrade to faster internet connection. The upgrades will tend to be younger households with internet users being between 15 and 34 years. This is a prime target audience for online gaming", explains Jackie Seear, head of PR for RedDSL.
But it's not just the smaller players who are recognising the value of content. BT also realises it has to offer customers something special to get them surfing on the broadband. Its lastest push is an unplugged session with Mercury Music Prize winners, Turin Brakes, at the top of the BT Tower. It plans to stream the exclusive gig to its Dotmusic
broadband channel on 23 October.
"This event sends a clear message that Dotmusic is at the heart of a revolution in access to music" says James Poletti, editor of Dotmusic.
What it also says is that having a broadband connection is becoming increasingly important if you want to experience the full internet experience. But Gartner has a word of warning: "Consumers who can wait to get broadband access should hold off on signing up for a long-term broadband contract with an ISP until there is a wider choice of packages, at differing prices."