Post Office strikes again - but this time with broadband

Monday 29th October 2007, sees the nationwide launch of Post Office Broadband and Post Office HomePhone with Broadband. The products will be aimed at two target audiences. The first is the over 50’s, who make up 25% of the UK online population.

The second group are those consumers who want and need the convenience of paying for their broadband service in cash at their local Post Office branch, negating the need for setting up direct debit payments. By using the BT network, the Post Office claims its service will reach 99.6% of the UK and it aims to sign up 1 million customers by 2010.

Steve Weller, Head of Communications Services at uSwitch.com, comments: “Targeting lower income households and the older generation by allowing cash payments at one of the 14,000 Post Office branches is a great idea in theory. This will go some way towards eradicating the digital divide between the ‘haves’ and the ‘have not’s. However, it’s disappointing that consumers will have to pay a £12 annual premium for the privilege of paying in cash. It’s also worth noting that the Post Office’s pricing is not the cheapest on the market. This prize goes to Tiscali who offer a phone and broadband package for £14.99 a month compared to the Post Office’s £21.95 - £84 a year cheaper. It is clear that the Post Office is not competing on price and their approach is to trade on their established name and high street presence.

Are the Post Office really Fairer, Better, Easier:

Fairer?Post Office broadband is not completely transparent. Like other providers they are advertising their service as ‘unlimited’ when it fact, it is limited. Downloads will be capped at 40Gb.

Better? If you want a home telephone and broadband service, you can get more, for less, from TalkTalk. After initial set-up costs of £29.99, for £16.39 a month TalkTalk customers can get up to 8Mb broadband, line rental, free evening and weekend calls to UK landlines plus 28 international destinations. The Post Office does not include international calls. Also, as they are a new provider you cannot yet judge their customer service levels.

Easier? One of the main selling points is that cash payers can pay for their bills at their nearest Post Office. They will also be offering set-up support, however the standard of this service is still unknown.

Weller continues: “Many broadband providers operate a two-tier pricing structure, charging up to 240% extra for the same service just because of where people live. The Post Office is ‘fairer’ by offering one-size-fits-all nationwide pricing so no one is penalised because of their address. However, what lets them down is advertising an ‘unlimited’ service, when in reality, it is limited to 40Gb, although this should be a suitable cap for their target audience.

“The Post Office target is to sign up 600,000 broadband customers by April 2008 using their local branches and online store. They are claiming that most of this will be from new, first time broadband customers and not necessarily those switching from other providers. The target will be hard to meet. Only TalkTalk managed to reach such a high number of customers in a short period of time - but that was by offering a ‘free’ product. With so many other, already established broadband players, it will be interesting to see how the Post Office fares in reaching its ambitious goal.”