UK ISP Primus Saver to Scrap and Revamp Home Broadband Packages

Bargain hunters looking to take Primus Saver’s ultra-cheap £1.20 per month (plus £13.99 line rental) broadband and phone bundle, which comes with a 20GB usage allowance, free router and free UK evening and weekend calls, should take note that the ISP will soon withdraw it in favour of new “totally unlimited” packages. The existing fibre (FTTC) deals will also soon be gone.

Apparently the ISP has been busy reviewing its portfolio of products and concluded that capped packages, such as the one mentioned above, were no longer as popular as unlimited services (the 20GB deal only accounts for a small percentage of their customers). Meanwhile the competition has caught up with Primus and is now able to offer arguably more attractive packages.

Indeed if you pay just a little more than Primus’s £1.20 + £13.99 line rental you can have an “unlimited” usage package from TalkTalk or Direct Save Telecom and the latter (DST) is actually somewhat cheaper, provided you’re willing to pay for line rental upfront for a year (i.e. £1.95 + the equivalent of £9.95 per month).

As a result of this Primus Saver will remove their 20GB package on 1st August 2014 and in its place they intend to add two new unlimited data packages, although we don’t yet know what the pricing or features of these offers will be (the details are anticipated to surface next week) but we wouldn’t be at all surprised to see a higher price.

However that’s not the only change we’re expecting on 1st August 2014, with the ISP also planning a “temporary” (possibly lasting around 3 months) withdrawal of their residential ‘up to’ 38Mbps and 76Mbps superfast broadband (FTTC) packages from sale due apparently to low demand (other ISPs like BT have seen stable/rising demand for FTTC). Note: business products will not be affected.

The ISP is also being mindful of Ofcom’s new margin squeeze test (here), which could result in a small adjustment to the wholesale pricing of FTTC lines and thus Primus Saver hope to take advantage of any reduction via their future pricing strategy. Some have suggested that this could reduce the monthly price that ISPs pay by £2 (here), although others believe the reduction is more likely to be measured in pennies rather than pounds.

One thing is clear, while the big boys battle it out over TV services, content rights and advertising at a competitive level that’s difficult for others to match, the small fry are being left to struggle and pick from an ever diminishing pool of potential customers. Some have found a niche that works but many others won’t be so lucky.

At the same time the aggressive price cutting on standard broadband can make it harder to sell premium superfast services, although this rule is by no means universal and BT continues to grab the lions share of FTTC customers despite not strictly being the cheapest (marketing).. unless of course you count free BTSport and BTWiFi hotspot access into the value consideration etc.