Wanna resell broadband? Cut the contract

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Customers for broadband are proving increasingly resistant to signing up for long-term contracts, a new local survey reveals.

A survey of more than 10,000 broadband customers by broadband information site Whirlpool found that 58.8 percent were not willing to sign up for a broadband contract running more than six months.

"Customers are definitely moving towards ISPs who have shorter contracts," said site editor Simon Wright. "Consumers realise that broadband is a fast-changing market. But whether the market has responded isn't anywhere near as clear as how the consumer base feels."

Wright drew a parallel between broadband and the mobile phone market, which has also shifted away from long-term contracts towards short-term deals and pay-as-you-go packages.

Broadband customers also appear sympathetic to the ongoing battles between Telstra, which controls the nation's ADSL network, and other resellers. A massive 82.5 percent agreed that Telstra should not be allowed to own the ADSL network and also compete with resellers.
Indeed, Telstra's wholesale strategy might prove a barrier to resellers offering short-term contracts, Wright said.

"Telstra as part of their wholesaling will penalise an ISP who is reselling ADSL if the customer disconnects within six months," he said.

The survey by Whirlpool, which Wright freely admits is biased towards early adopters and broadband opinion leaders, also showed that attempts to use exclusive content as an attraction have largely failed.

Just 0.2 percent of respondents cited access to such content as an incentive to sign up for broadband, with "constantly fast speeds" a much more popular choice at 40.2 percent.

"Any kind of exclusive content isn't going to have a big pull in the future," said Wright.

A better potential market may be in packages specifically designed for hooking up multiple systems to a single broadband connection.
"Four out of five people surveyed network their broadband," said Wright. "That says to me there's a market there to be exploited."
Citywide wireless broadband may also offer possibilities, but only if the pricing is right. While 56.1 percent of those surveyed were interested in such a service, the vast majority were only prepared to pay $100 a month or less.

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