Frustratingly this doesn’t always work and the lure of significant cost savings is not to be underestimated, drawing in customers even after they’ve been warned of the potential pitfalls:

“Because of our usage caps, customers rarely complain about speed or service,” remarks Quik’s David Mitchell, before pointing out the difficulty in convincing customers that paying less can sometimes cause more problems than the advantage gained through savings. “Even when we explain, they say 'we'll take the chance'. Invariably we get a call a few days or weeks later asking how they can get out of the contract with the new ISP. Too late I tell them. Sometimes they remember and come back 12 months later.”

Fierce competition from the top-end has also been one of the driving forces behind three years of aggressive market consolidation, with many of the more independent medium sized ISP’s having long since been snapped up by their bigger rivals. Though there has been some degree of consolidation at the smaller end, Entanet’s Darren Farnden predicts that this could become more apparent in the future:

“With the onslaught of price competition among the big consumer names, we do expect to see some consolidation in the smaller end of the ISP market as these players conclude they're swimming against the tide and try to swim ashore or, worse, drown,” explains Farden.

It seems clear that modern consumers now expect a lot more for less money, a risky trend given the ever increasing demands upon an ISP’s bandwidth, due in part to the growing uptake of online video and Internet TV services. On top of this, faster services, such as those based off BT’s forthcoming ‘up to’ 24Mbps ADSL2+ technology, are due to enter the market later this year, potentially placing further demands on an already stressed industry.

In the meantime industry regulator Ofcom is said to be working with other official bodies, such as the Advertising Standards Agency (ASA), to improve the accuracy of advertised broadband speeds. However, this is unlikely to dent the appeal of super-cheap packages because consumers quite understandably vote with their wallets first.

“There’s only so much you can do, ultimately people will make their own choices and the best you can hope for is to try and educate them about the pro’s and con’s,” states Mark Jackson, the Editor of ISP focused consumer information website www.ISPreview.co.uk. “Broadband is a ‘best efforts’ service and if you’re paying less then nine times out of ten you’ll get less too.”

“Far too many consumers enter the market by treating ISP’s in the same way as they would their supply of gas or electricity, which is patently wrong. Picking a cheaper gas supplier has little impact on your service, yet paying considerably less for broadband could result in slower speeds, poorer support and a much more restrictive service.”

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