It is nice to hear a CEO admit to the fact that he might have over-hyped his offerings a bit too much, and without sweating the details. Charles Dunstone, the maverick CEO of UK-retailer Carphone Warehouse confessed to The Sunday Times of London that his company was struggling to meet the demand for free broadband, the company had launched in April 2006. Nearly 400,000 have signed up for the service.
“Free is such a powerful word,” said Dunstone. “It’s a £250-a-year saving for most people. In hindsight, maybe I should have anticipated that a bit more.
Well, that might be only partially right. James Enck, a man who marries the American forthrightness with British understatement writes, “Beneath the media hype about free broadband in the UK lies a sordid underbelly of broken promises and frustrated customers. In the latest example, one of my colleagues has suffered from a complete lack of connectivity on TalkTalk broadband for the past 36 hours (the line is working fine for voice.)”
Dunstone’s good intentions aside, there is a bit of a broadband brouhaha brewing in UK. Rupert Murdoch’s BSkyB has now offering aown free 2MB/s broadband connection to its existing television customers. Murdoch’s plan – make the profit on TV service. Dunstone wants to make money on voice and wireless services – two businesses that are well, under price pressure.
5 thoughts on “Free … Too much of a good thing?”
I really doubt anything can be “Truley Free Forever” and I’m just waiting for those in power to figure out a way to charge us for the Air that we Breathe (If they aren’t already)…
I wrote a blog post/rant about this product when it was launched and I could write another post/rant again. For those of you outside of the UK who these kinds of product bring competition to the market – think again.
They are probably the number on contributor to the beginning of the colapse of the ‘quality broadband’ sector in the UK.
All of the other major ISP’s are falling over themselves to try to match this kind of ‘artificial’ competition (because it isn’t sustainable) by reducing their price (and thus their service quality and service offerings) to get as close to ‘free’ whilst still making a profit.
I’ve had to move ISP once already as it was caught up trying to stem the tide of clueless customers migrating to ‘free’, by reducing their prices unnessessaryly and then reduce their costs by capping and throttling bandwidth.
Once customers sign up for TalkTalk Broadband (which has an 18 month contract – you still have to pay the line rental on the phone) they are screwed.
Apart from poor customer service and all the other ‘frills’ removed, TalkTalk Broadband has many ports blocked and traffic shaping, meaning no BitTorrent, no file sharing, no Usenet and I believe no FTP either.
Orange (France Telecom) also offer a ‘free’ product, also on an 18m contract, this time capped to just 2Gig a month. You can use anything above 2Gig a month! I downloaded a 1.6gig Ubuntu distro yesterday!
Economics would have you believe that as people realise these products are bad, the market would re-adjust. But the message isn’t getting out, and particuarlly here in the UK people love the word ‘free’. It has such an allure that they can’t help themseles, even those who know the issues are prepared to suffer 18 months of crap-but-free broadband rather than just pay the honest 25 quid a month for a decent service.
It’s facinating insight to the negative disruption to a domestic broadband market and an equally interesting insight to the mindset of the British consumer
I setup a Talk Talk hell blog to chronicle my own experiences with their ‘regular’ 1 MB offering (the best I can get in my area.) Through no fault of my own people starting finding it via search engines and WordPress. Almost every day I receive a new comment from a frustrated user who hasn’t been provided service, or has and it’s been shoddy and can’t resolve it with the company.
Other forums show similar outrage and the constant ‘discovery’ that the Talk Talk international call plan actually works out to more than they would have paid of broadband service anyway. It’s throughly disappointing.
There is a nice cartoon in the VOIPEX Blog – (Spanish) in this post
addressing exactly this issue. Two pipes representing broadband width. The narrow one being free. The wider one with a cashier in front of it.
Good ole Alfred Marshall in his Law of Demand and Supply put it plain.
om, you know what would be awesome? if you could write a new 2006 version of the “free beer vs free speech vs free software and services” issue, catching up with stallman et al, and maybe throw in (now) elgoog (not just wifi, but they basically offer .mac for free) and of course all of the rights to privacy that people toss up for free utilitites like photo and video sharing…(sorta)…just a thought…it’s a way more interesting issue now that giants like sun, oracle, microsoft and others are in the middle of the fray…
this is a perfect example, brit dude ‘didn’t anticipate accurately’ that giving away valuable stuff for free would draw crowds? hello? hasn’t he ever seen people crowd the counter at harbucks for free brokenup crumbs of crappy baked goods? exactly..