Why broadband advertising campaigns can’t always be trusted
Posted by Luke in Broadband Guides on May 17, 2012
We’re more than aware of the tricks advertisers use to market products and services and over time consumers have learned to take the information they are given by advertising campaigns with a pinch of salt. But although by now we may be familiar with some techniques, knowing to look out for asterisks and small print before buying, some things still catch us out.
As a comparatively new concept to consumers compared to other marketing campaigns, internet connection deals still seem to be getting away with using advertising pitfalls and traps. Arming themselves with advertising tricks up their sleeve, providers are managing to hide their services’ shortcomings in a veil of jargon. As Mbps is thrown around as a unit of measurement and promises of ‘infinity’ are made, it can all get very confusing.
News stories are rich with tales of large service providers receiving a slap on the wrist for engaging in misleading advertising campaigns. A common tool the services have been using to entice customers in is by stating ‘up to’ speeds that are very rarely reached. Stories tell of communications regulator Ofcom recently instructing service providers to give an estimated time of the actual speed a customer will receive, whatever that figure may be, as opposed to the misleading ‘up to’ quotas.
Ofcom’s research and the release of data proves just how much the campaigns are getting away with as some results are quite a lot more extreme than was expected. The data is pretty useful for users to see the clear information they want without it being jaded by clever marketing tricks.
One particular observation has been noted of a package offering speeds of ‘up to’ 24Mbps was actually handing out and average sluggish speed of 6.2Mbps- a significant difference.
The providers have effectively shot themselves in the foot in some circumstances where they continue to produce exaggerated speed predictions they cause controversy even when national speeds are genuinely improving.
Internet services providers, or ‘ISP’s, don’t always take the blame straight away when confronted about the service they are providing. Some ISP’s have retaliated by suggesting that the source of the problem may be to do with the customer’s router and setup rather than a fault in their part. While this seems like an excuse every aspect should be checked before fingers are pointed and to really achieve the potential of a service.
Away from the advertisements, customers can find help deciding which service is right for what they are looking for, from router comparisons to deals and packages, to Orange and
Sky broadband reviews, among other services. Help can be found for customers hoping to get a great broadband deal without being lured in by a misleading campaign.
UK Broadband 42% Slower than Advertised Says the Guardian
Posted by Dai in Latest Broadband News on May 15, 2012
According to a recent survey conducted by the Guardian newspaper, residents of the United Kingdom are receiving internet speeds as much as 42% slower than advertised.
Over three days as many as 3,000 readers took part in the Guardian’s survey of internet speeds and they indicated a vast shortfall between advertised and received internet speeds. Although many areas seem to have been enjoying the speeds advertised, many more have be languishing with half the speeds advertised and others have suffered from complete black spots. Meaning that, at a time when the possibilities of broadband are being realised and super-fast speeds are being promised, many customers are feeling severely short-changed.
The survey found that, on average, customers were paying for 12 Megabits per second but were, in reality only receiving and average of 7Mbps, constituting a gap of 42%.
Contributors to the survey also complained about major black spots in city centres as well as stretches of exposed and decrepit copper wiring that would stop working in the rain. Some businesses even reported having to move in order to chase faster internet speeds.
The survey found that TalkTalk and Sky had a shortfall of 60%; Sky customers had been promised an average of 12Mbps but were receiving on average 4.8Mbps. This is the widest gap between promised and actual services and has been described by Hugh Colvin to be like “buying a dozen apples and you got three.”
Virgin customers were found to be receiving a 41% shortfall from a promise of 30Mbps to actually getting 17.7Mbps. It was BT who limped to the head of the pack with the smallest shortfall of 27%, providing only 6Mbps after promising 8Mbps. It may be little consolation to BT customers however.
Advertising rules were recently tightened up by Ofcom following their own study of broadband speeds. They ordered companies could only advertise a speed as “up to” and only if that speed was available to at least 10% of their customers. Even some broadband providers criticised this threshold as being too low, trends are increasing now for providers to negotiate individual deals.
Providers have tried to defend themselves, promoting continuing improvements to their services and calling for more defined rules regarding advertising. But even if service providers do begin advertising exact speed quotes it won’t change the overall slow speeds across the nation. Broadband is becoming an essential resource for business and work, online industry has grown larger than the both the health and education sectors, if people can’t receive the fastest internet speeds they will fall behind.
The Guardian’s survey highlighted whole regions suffering from low speeds which, if it continues, could create a serious new divide between customers who have high-speed internet, and those that do not.
BT sees profits rise, despite a fall in overall sales
Posted by Hollie in Latest Broadband News on May 12, 2012
BT has announced a rise in their first quarter profits, despite a fall in actual overall sales. The company saw a significant boost to their earnings back in March of last year, which saw them able to reach a deal allowing them to pay off a substantial portion of their staff pension deficit fund far earlier than was initially expected.
In paying off £2 billion of the £4.1 billion deficit (one of the largest single pension payments made by a company), they were able to alleviate a great concern, which had worried investors for some time.
Ian Livingstone, chief executive had this to say: “In what remains a challenging environment we have delivered another year of growth in profits and free cash flow.” BT stated that they have now been able to roll out fibre optic broadband to an estimated 10 million homes and businesses across Britain, and this has all been achieved many months ahead of schedule.
Unsurprisingly the profit generated from landline calls fell, as people increasingly come to rely upon their smartphones and the free service Skype. However, there has been a strong demand for their fastest broadband to date, BT Infinity, with a reported 131,000 customers having signed up to the service in the last quarter of 2011 (Infinity broadband reviews have been overwhelmingly positive thus far). This, along with their global services divisions, which is finding growing success in Asia and Latin America, has caused analysts to speculate whether this would allow the company to significantly increase its dividend over the coming months.
Due to BT being able to pay off a significant portion of their pension fund – which saw them reap gains through interest – combined with a large tax credit, the telecom company not only saw profits rise, they were also able to make far larger payouts to their shareholders. These one-off gains were estimated at a staggering £166 million.
These lucrative earnings have restored much confidence in the company from its major investors and shareholders, who had been understandably somewhat perturbed by the warnings back in 2008/2009, incited by reports that BT was fumbling its management of its aforementioned global services division.