NTL supercharges broadband
By Tim Richardson
Published Wednesday 3rd November 2004 13:00 GMT
NTL looks set to take a big lead in the UK's broadband sector by
ramping up speeds next year for residential broadband customers while
freezing prices. The move will leave a yawning gap between NTL's
offering and BT-based ADSL services.
NTL's entry level 300k service will be supercharged to 1Mb while still
costing £17.99 a month. Its new 2Mb service will cost £24.99 while 3Mb
will cost £37.99.
The speed increases will be rolled out to new customers during the
first three months of next year, although existing customers must
cough up a £25 "administration fee" to make the switch.
Industry insiders reckon BT will have to follow suit or risk losing
out, following this latest shake-up to hit the sector.
Said NTL chief exec Simon Duffy: "To retain our leadership position in
broadband, we will be increasing the speeds of our ntl: Home products
in Q1 2005 to 1Mb, 2Mb and 3Mb at existing prices. This decision
reflects our determination to ensure that we will always have the most
competitive range of broadband products in the marketplace."
The announcement accompanies NTL's Q3 results which showed that
revenues swelled five per cent to £583m from £555m during the same
period last year. Revenues were boosted by an increase in broadband
and telephone subscribers, but offset by lower voice revenues in NTL's
business division.
Despite this, the cableco scaled down its net loss by 19 per cent to
£95.4m from £118.4m in Q3 2003. Part of this is due to NTL paying less
interest following its recent refinancing, the company said.
It is also trying to cut costs by reviewing its "disconnection and
credit management practices", and is in the process of elbowing 23,800
customers during Q4 who should have been "disconnected
previously...due to non-compliance with our policies". It's also
reducing the number of days customers get to settle their accounts
before it disconnects their services.
Duffy said: "During the third quarter, we remained focused on our four
stated objectives and, despite a more intense competitive environment,
were successful in increasing market penetration, growing total
revenues year over year, expanding underlying margins and enhancing
cash flow.
He also added that two call centres had been closed during the last
three months. Another six calls centres will close their doors in Q4.
"The call centre consolidation, together with other efficiency
initiatives, will reduce overall headcount to around 13,100 by the end
of the year, underscoring our continuing efforts to improve margins,"
he said.
Incidentally, NTL failed to provide any more detail on its decision to
pull the plug on its direct telephone service in Ireland last month
amid fears that hardware might overheat.
Said NTL: "In October, ntl: Ireland ceased its domestic direct
telephone service, which had a customer base of 2,200, after
identifying a potential safety risk. This decision did not affect any
other service provided by ntl: Ireland." Oh well. ®
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