The ISP’s have tried to differentiate their selves by offering different speeds for the internet, they set usage guidelines, and some of them offer different features such as a free modem, connection, free wireless, email and some of them offer free phone calls to try and attract customers to sign up to their service. Although by the companies trying to differentiate their selves they have ended up offering many similar features as each other.
Most of the companies use some form of advertising to let consumers know what services they are offering. This enables the companies to also look what each other are offering to the consumers so that they can also offer a package which is able to compete with what the other companies are offering, this means that there is perfect knowledge in the market.
A lot of the companies also offer low prices for the first few months and this is done to attract customers to sign up for a year broadband and then the company has this customer subscribed to them for a year. This is a marketing technique which many of the big companies use to attract customers. They try and gain a competitive advantage in this way to gain the most customers to sign up for their services.
There are also some large companies which are well known by consumers, these have their brand name as a competitive advantage to differentiate them from the other companies because consumers know about them and may look to see what they have on offer when selecting an ISP.
I have also looked at the regulations for broadband in the EU so that this could also give me an idea of what the market is like for broadband. I found out this “The EU’s regulatory framework for electronic communications (today’s EU telecom rules) aims at stimulating competition and therefore investment and innovation while increasing consumers’ choice. The wholesale broadband market is one of the markets that is, under the EU rules, subject to telecom regulation by independent national telecom regulators with the objective of opening this market up to competition by new market entrants.” This shows that the governments are trying to make the market for broadband more competitive so that it is closer to perfect competition and to ensure that consumers are getting a fair deal.
Do customers get a fair deal?
I am also looking to see if consumers get a fair deal when selecting an ISP, I have created a questionnaire and have given it to a cross section of the public so I can see what they think of the internet which they are being provided with.
I think a potential problem with the marketing of the internet as a product is that a lot of the companies are using confusion marketing as a techniques because 50% of the people which I asked were unsure what they were really getting included with their internet package, they had a basic idea, but didn’t really know what was truly on offer to them. I think this is a way that customers are being exploited by ISPs as they don’t truly know what they are paying for.
I think that a good way to see if customers are getting a good deal is to see how allocative efficient the companies or market are and I think that by doing the questionnaire this should help me see how the consumers are also feeling about this.
Price:
The I think that consumers are getting quite a fair deal at the moment when it comes to price because there are a lot of low introductory prices for the first three months for consumers on offer which they can take advantage of to save them some money.
The packages which are on offer are also quite similar because they nearly all offer: an average user package for around £14.99 a month then an above average user for around £17.99 a month then a high user one for around £25 a month, so they can pick the package which will suit their requirements and needs.
I think though that there are some catches especially with the usage limits because the customer may only be allocated with a certain limit to use and if they go over this limit they have to pay extra for the amount they have used over the limit, and if a consumer purchased a service which was below the limit they require they could end up spending extra money this way. Most of the companies offer unlimited which is good but generally it is the cheaper contracts which set usage limits for their customers. Most of the people who I asked do have unlimited usage though, so it shows consumers are getting to know about this. Most of them also seem to have to £14.99 package because they seem to think that this is good value for money for them.
Quality:
The quality of the service which the customers receive generally seems to be good for the customers which I asked, they all seem to be happy with the quality of the service. One Wanadoo customer said that they had a problem with their internet which kept disconnecting them. But generally they seem to have no problems and the two BT customers also said that was a reason why they thought it was the best value deal, because it is very reliable.
Choice:
I would say that there is quite a lot of choice in the market because it is fairly competitive as there are small barriers to entry but there are some major competitors within the market which do a lot of advertising and have the strong brand names and then there are also quite a lot of smaller companies which also provide the internet, so there is quite a lot of choice for consumers.
Choice in the market creates competition and it is important to have competition for consumers to ensure that they are getting a better deal and are not paying a monopoly price for the service. By having competition in the market it keeps the prices and services which the companies offer at a low price to stay competitive and it basically just value for money for the consumers, perfect competition is ideal in a market.
In conclusion I think that the market for ISP’s is quite a competitive market because of all of the companies which are already competing in that market offering consumers a wide choice allowing them to decide which is the best service provider to suit their needs. I also think that consumers are getting a fair deal, but only if they have the internet because some of the providers offer benefits for ordering online and if a customer does not have the internet they could miss out on these things. For most consumers they are able to shop around on the internet and enables them to do this much easier as they can look at all of the companies and see what they are offering, I think this has also made the market a lot more competitive. Most of the customers which I asked are also happy with the service which they are receiving so this shows that they think that they are getting a fair deal, as most shopped around when looking for an ISP so they got the best deal they could at the time of sign up.
