Wednesday, June 17, 2009

BPN 1355 FTMH - UPC lowers internet tariffs

Since Monday UPC in the Netherlands has lowered its internet tariffs drastically. Since it completed its Fiberpower (fibre to the corner) and offers speeds up to 120Mbps, UPC is technically ready to compete with KPN and other ISPs in the fibre networks. The only real difference is that UPC for the time being will compete with FttH networks, while UPC has fibre networks to the corner. The last mile will be a coax link. Another technical difference is that the FttH fibre networks connect subscribers one-to-one to the network, while UPC links a series of subscribers to the head station; with more subscribers on the line the speed will slow down.

Now UPC starts to compete in the market by lowering the tariffs. The new internet subscriptions have six flavours. The cheapest one with a download speed of 5Mbps and an upload speed of 0,5 Mbps will cost 18 euro. For the fastest speed of 120Mbps download speed and 10Mbps a subscriber will pay 70 euro. The other four intermediary speeds are:
- 25Mbps (down)/1,5Mbps (up): 25 euro;
- 30Mbps (down)/3Mbps (up): 30 euro;
- 60Mbps (down)/6Mbps: 40 euro;
- 90Mbps (down)/6Mbps: 50 euro.

UPC starts the marketing campaign by inviting subscribers to change throughout its area. Yesterday I received an offer to pay the same money for a triple play subscription, while the internet speed was raised from 10Mbps to 30Mbps. For 46 euro I would receive 30Mbps, digital TV with DVR with a standard package of radio and TV as well as an unlimited telephony package; mind you the comparable KPN offer would cost me 65 euro. The offer of UPC is good for two weeks.

It is a first shot in the competition to come. There are already areas with fibre coverage. But soon large areas like in Amsterdam, Rotterdam and Almere will be operational. In Almere for example no less than 75.000 homes will have been passed in the fibre network by the end of 2009. A majority of these households still have a subscription to UPC cable, because of the television distribution; only a minority have a triple play subscription. KPN so far is the only provider which can offer a triple play subscription on fibre. Other ISPs have indicated to follow, but have not published their offer and are not canvassing. But also KPN starts to mingle into the fight as it now has a 6 months offer of its silver package of 80 euro (50Mbps download; 5 Mbps upload; > 70 TV-channels; unlimited telephony; free installation) for the price of a bronze package of 65 euro (30Mbps download; 3 Mbps upload; > 50 TV-channels; unlimited telephony; free installation). But this is only a temporary offer with no sight on the price going up or staying the same as the offer.

The Netherlands will go into the holiday mode soon, roughly within two weeks. After the holiday in September the real fight will engage. I guess that the offers will get better by that time. So I will not even consider the UPC offer yet. But it is nice to see that the old cable monopolist is fighting against the incumbent telco. It means competition and lower prices.

Blog Posting Number: 1355

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