ISP V21 today announced the launch of its broadband service, the cheapest available in the UK, offering subscribers a fast internet connection for just £19.99 a month.

But the service isn't that much cheaper than what's on offer from competitor PlusNet — its broadband package costs just a pound more at £20.99 per month, although the initial activation fee is higher.

To take advantage of either deal, users must sign up for one year. This tie-in clause may put people off, as smaller ISPs aren't known for their staying power.

"Users only pay by the month even though they sign up for a year, so if something should happen, which is purely hypothetical, then they would simply stop making monthly payments," said a spokesman at V21.

Available from 1 August, users will be required to pay £70.48 as a one-off installation fee as well as a modem charge of £94 unless they already have their own ADSL modem. In this area V21 actually costs more than PlusNet which charges an activation fee of £58.75 with its yearly contract or £70.50 for the monthly service.

Adding all these figures together, V21's claim to be the cheapest broadband provider looks a little weak — over a year there is only about £4 difference between its offering and PlusNet's. Still, every little helps.

V21 currently has around 40,000 subscribers to its internet services.