Virgin discount broadband prices while BT boost speeds

simon chandler
By Simon Chandler

virgin media logo outline

VIRGIN Media have discounted their broadband only packages, reducing the monthly cost for new customers by £6 for all four of their services.

Their 50Mb, 100Mb, 200Mb and 300Mb VIVID broadband packages are all being given a discount that will last for the 12 months of a new customer's initial contract, with their VIVID 300 package, for instance, being cut from £48 to £42 a month.

Meanwhile, BT aren't cutting prices but boosting the speeds of their existing BT Infinity 1 customers, who will be taken from "up to" 52Mb to "up to" 76Mb, so long as their copper lines can support it.

This may not be as headline-grabbing as the Virgin Media price cut, yet in rewarding loyal customers with an improved service rather than appealing to new ones with an introductory discount, BT may have taken a modest yet more substantial step towards making the broadband market more competitive.

Discounts

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Virgin Media's new range of discounts comes at a time when their existing customers are being hit with price rises, which from November will increase from £1.99 to £3.99 a month depending on the package.

While such increases might potentially make their current customers reconsider their subscriptions with the provider, Virgin are taking a pre-emptive step towards replacing any leavers by reducing prices for new customers.

As shown below, they've cut each of their four broadband-only packages by a £6 a month. Of course, this lasts only for the 12 months of a customer's initial contract, and customers should also remember that they have to pay a one-off £20 activation fee.

PackageStandard monthly feeDiscounted fee
VIVID 50 broadband£33£27
VIVID 100 broadband£38£32
VIVID 200 broadband£43£37
VIVID 300 broadband£48£42

Not only do new customers have the benefit of discounted subscription fees, but their subscription comes with all the usual broadband package necessities:

Deals

Yet as generous as this all seems, Virgin Media have made price changes that aren't so bountiful.

Aside from the aforementioned standard price rises, they've also increased the discounted monthly fees on their broadband and phone bundles:

PackageStandard monthly feePrevious discounted feeNew discounted fee
VIVID 50 broadband and phone£40£27£29
VIVID 100 broadband and phone£45£32£34
VIVID 200 broadband and phone£50£37£39
VIVID 300 broadband and phone£55£42£44

Why such rises have been introduced isn't entirely clear, yet Virgin Media have in recent months admitted that their flagship Project Lightning roll out hasn't progressed as well as originally reported, falling short of a previous estimate by 142,000 premises.

Speed boost

Yet what could cast Virgin Media's new discounts in an even more unflattering light is the speed boost BT are introducing for their existing Infinity 1 customers.

PackageStandard monthly feeCurrent discounted fee
BT Infinity 1 and phone£49.99£29.99

While these customers saw price rises in April, BT are now automatically upgrading their usual download and upload speeds wherever possible.

This means their "up to" 52Mb speed is being upped to 76Mb, yet that's not all, since as they explained in a letter to customers, "On top of this we are also doubling your BT Cloud storage for free so you can now back up even more of your precious photos and videos online".

This represents an opposite marketing tactic to Virgin Media's, since it actually rewards existing customers by improving their broadband services, rather than entices new customers with a discount that will last for only one year.

Competition

And that BT have taken a step that puts service quality at the forefront is a good thing, since a new report from the Social Market Foundation (SMF) has found that a lack of competition in the broadband industry has had a negative effect on service quality.

In fact, the SMF conclude, "There are signs that the broadband market has become less competitive in recent years. Consolidation in the industry has reduced the number of
large players in the market and two firms - BT and Sky - had a combined market share of 55% in 2016."

To be sure, BT (and almost every other ISP) are just as guilty as introducing short-term discounts (or bribes) to attract new customers. As a policy, this creates barriers to market entry and ultimately stifles competition, since newer, smaller ISPs are less able to absorb discounts.

Yet once again, in providing a speed boost, BT are at least putting more emphasis on the quality of the service provided, and thereby putting pressure on other providers to offer boosts of their own.


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