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UPDATE ISP Kijoma Says BT NGA Broadband Overbuild Wastes Public Money

Friday, May 1st, 2015 (8:44 am) - Score 2,730

Part of the problem stems from those state aid rules, which initially allowed BDUK to effectively exclude wireless providers from being considered as true NGA operators unless they agreed “a commitment to replace non-wired connections with fibre at a later stage” (here). The position, which Lewis calls “stupid and unworkable“, wasn’t popular with FWA ISPs and meant that some councils simply marked areas that had been covered by related providers as “not spots“, even though they weren’t.

The problem is well demonstrated by a comment that was made to Lewis in response to a Q&A session with the WSCC during 2010, which formed part of a question the leader event and reveals the local authority’s early and rather unusual approach towards defining “not spots“.

Mike Hicks, WSCC’s IT, Economic and Communities Boss (2010), said:

My view of “not-spot” is that strictly speaking there is nowhere in the UK (or for that matter Western Europe) that has no coverage for broadband. It is possible (although potentially very expensive) to access a broadband service by satellite, wireless or Ethernet absolutely everywhere. In my interpretation, I have taken that a not-spot is any location where there is no open access, reasonably priced service provided.

Broadband speeds of less than 2Mbps should probably be included in the definition but I have created the phrase “not-a-lot spots” for those areas. In the case of the non-ADSL exchanges, I accept that Kijoma has coverage in those areas and that the prices are appropriate. However, a closed access service does make these locations, in my view, “not-spots” by the definition I am using.”

Admittedly very few FWA providers offer a truly open access network, which is a requirement for securing state aid funding, and this has hindered the ability of some smaller rivals to gain funding.

But most fixed wireless operators run off a commercial model and so this particular aspect is arguably not nearly as much of a problem as the prior rejection of NGA status, which effectively allows BT to overbuild because the councils don’t recognise anybody else as being present.

Conversely some anecdotal evidence from residents in the affected areas suggests that the council, at the same time as ignoring Kijoma’s existence on its maps, may still be using the wireless ISP as an excuse for not investing.

Lewis claims that several people who enquired with WSCC about the possibility of bringing fibre broadband to their area were allegedly told that they could not have fibre under BDUK because “there is another service available” (i.e. in this case implying that Kijoma operated in their area).

Bill Lewis continued:

If you speak to WSCC they will mumble about the lack of post code information from us at the last [Open Market Review (OMR)], what they will not say is that during the previous OMR’s we provided our coverage and when it came to them publishing the results of the OMR, the maps had none of our coverage shown on it, not even for “basic” broadband.

We had to raise this with them, they then took the maps down and never replaced them. We refused to provide some information at the last OMR due to the backdrop of clear overbuild from the earlier OMR data and a refusal to register Kijoma’s existence in the county with BDUK.”

The situation is not a million miles from the stance that B4RN took after Lancashire County Council seemed unwilling to de-scope their planned coverage from the BDUK based contract with BT. In that case B4RN was even deploying a pure fibre optic network, which is what was being recommended for future upgrades.

Since then B4RN and other altnet providers have found it increasingly counter-productive to engage with local authorities and instead prefer to simply focus on beating BT at its own game, by delivering a superior service. In B4RN’s case the community-built nature of their network encourages strong uptake, but other providers will remain vulnerable.

The good news is that BDUK’s future Phase 3 roll-out, which should focus on improving connectivity to the final 5%, looks likely to be even more accepting of fixed wireless ISPs (several of the preliminary pilots are wireless-based solutions) and this may make such operators harder to ignore; assuming any future Government doesn’t do a U-turn. But that will do little to help Kijoma and similar ISPs because by the time BDUK enters its third deployment phase the damage may have already been done.

One upside to all of this is that consumers will benefit from a greater choice of ISP, although it’s difficult to know how long that will last unless the use of public funding starts to be managed more constructively. In an ideal world the public funding would be better used serving similar areas where no NGA suppliers of any sort exist.

It should be said that BT aren’t strictly to blame here, they’re a big commercial company that will understandably use any opportunity to grow. As such it comes down to the local authority and Government to ensure that their rules are effective enough to tackle such problems without allowing the overbuild of viable private competitors.

In the course of writing this article we did contact WSCC for a comment, but so far they have yet to furnish us with a response and we will update once one arrives.

UPDATE 7th May 2015

After a week of waiting, largely due to the bank holiday, we now have the official statement from WSCC.

West Sussex County Council’s Statement to ISPreview.co.uk

West Sussex County Council is investing in broadband infrastructure for the purpose of meeting the government’s target of coverage by ‘superfast’ broadband of 95% of the UK by 2017.

The area that is eligible for public funding is informed by the Open Market Review (OMR) and subsequent State Aid Consultation which took place in the autumn of 2012. In the review we asked all telecommunications suppliers in the county to provide us in confidence with information about their current and planned (up to three years) broadband services in West Sussex.

This exercise was carried out in accordance with European Union regulations and as part of the central government procurement framework as set out and managed by BDUK (Broadband Delivery UK, the government department responsible for broadband policy).

We invited Kijoma to respond to the OMR and were supplied with a picture showing an area of coverage drawn onto a map. This was not supported by details at a postcode level of premises for which their service met the technology guidelines for an NGA broadband service, or any information of sufficient detail to allow us to assess with due diligence their current or future plans for services.

As part of our State Aid consultation, we published mapping without reference to Kijoma as we were not able to detail their coverage. In subsequent correspondence with Kijoma we took a view that we would acknowledge their coverage within our mapping of ‘basic’ broadband, which was published online in January 2013.

We have heard since from communities who have challenged Kijoma’s declared coverage of areas where a wireless supply of broadband is not available.

We carried out a second OMR to re-map the area eligible for funding made available from the ‘superfast extension fund’. We again invited Kijoma to take part but again did not receive sufficient detail from them either to our request for coverage information, or to the mapping that we subsequently published for further State Aid consultation.

West Sussex has three of the four non digitally-enabled exchanges in the UK. It is necessarily part of our roll out of improved infrastructure to upgrade all three exchange areas due to the fact that no credible evidence was provided by any network operators of qualifying NGA broadband infrastructure including Kijoma’s.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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37 Responses
  1. Avatar X66yh says:

    BT might be using their own money to upgrade those areas with existing superfast BB providors.

    I did read either on here or on TBB that there was (allegedly) some convoluted reason why B4RN did not want to engage in the OMR process

    1. Mark Jackson Mark Jackson says:

      A lot of the related work references the councils BDUK scheme, as seen in some other pictures that we have of the deployments. Kijoma has said they don’t have a problem if it’s purely commercial, but in a number of areas it’s not.. hence the whole article above.

    2. Avatar Gadget says:

      If it is BDUK deployment, doesn’t it come down to what the council defined the area as after their Open Market Review? If they declared the area white it will be in the contract to be upgraded, why it was declared white in that case is something for the Local Authority. That’s not to say it couldn’t be a subsequent contract amendment, but again something within the gift of the Local Authority to either initiate or agree.

  2. Avatar GNewton says:

    “altnet providers have found it increasingly counter-productive to engage with local authorities and instead prefer to simply focus on beating BT at its own game, by delivering a superior service.”

    I think that nicely summarizes the BDUK farce.

    1. Avatar PeterM says:

      But will enough people pay for that superior service to make it profitable. Remember with fixed wireless they need to be concentrated in a small area.

  3. Avatar Tim says:

    Kijoma says a lot, does little… Just look at thinkbroadband forums…

    1. Avatar PeterM says:

      The trouble is Tim, would you invest in extra capacity when you know that a state monopoly can make everything you do unprofitable?

    2. Avatar TheFacts says:

      Can’t be a monopoly when there are other suppliers in the area.

    3. Avatar PeterM says:

      @The Facts
      For me and most other postcodes in rural West Sussex the only way that we can receive fixed broadband is via a BT cabinet unless you count satellite of course but I don’t count that.

  4. Avatar Phil Coates says:

    To be fair, the restrictions on overbuild seem to be largely ignored most of the time. Locally, BTs decisions that several areas were ‘not commercially viable’ seem to have been predicated on the near blanket presence of Vigin Media. That has not stopped BDUK funded cabinets appearing – and not just in the ‘watershed’ areas.

    Seems to me that as the sole provider, BT simply tells Councils where there will go and the Councils just bend over and lube up.

    1. Avatar PeterM says:

      I was told by WSCC that they couldn’t legally improve my meager 3.5Mbps fibre service because of overbuilding.
      The reason was that they said fixed wireless was available to me – only it wasn’t!
      The fixed wireless provider they thought could provide me with a service was Kijoma.

    2. Avatar fastman2 says:

      im afraid that is incorrect – there are are a number of area identified as white which are now greyt due to other network activey — more consiprary theories Again

  5. Avatar PeterM says:

    The net effect of all this is that Kijoma have been frozen out of the West Sussex broadband market. The bureaucratic process, especially the EU rules, simply mean that no one other than BT can profitably provide us with our broadband in rural West Sussex.
    The consequence of this is that looking back Kijoma have been unable to expand their network and looking forward it will depend on the loyalty of their existing customers if they continue to offer their service in West Sussex.
    On a personal level I could certainly have benefited from Kijoma’s service. In the past I could only get 1.75Mbps on ADSL and now I can only get 3.5Mpps on fibre.
    If BDUK had embraced Fixed Wireless Broadband I would have been enjoying speeds of 30Mbps now instead of waiting to see when and if BDUK2 or BDUK3 delivers.

  6. Avatar Bill Lewis says:

    Thanks for the comments all.

    As PeterM states, there is no incentive for a long established commercial ISP to expand coverage at their expense if there is a state funded competitor with unclear objectives operating in the area.

    Although not alluded to much in the article, the primary objective of the county council was a “BT strategy”, Kijoma and any other operator within the county were an inconvenience and for the sake of gaining the maximum out of the BDUK pot, had to be suppressed/marginalised.

    West Sussex has 3 exchanges that BT refused to fit ADSL too (not viable they said). All 3 exchange areas are covered by Kijoma, including those who would be on lines too long for ADSL and definitely too long for FTTC (although they have 1 cabinet between them, the rest are all EO lines).

    If they were to put this in their bid for BDUK, it would of reduced the pay out somewhat i suspect. Fortunately for them the BDUK and EU process has continued to demonize all other technologies and non BT based providers since. So they probably have a water tight alibi now. “.Gov said we could do it”.

    Tims point is valid, on The Think broadband website there are some people complaining they cannot get the Kijoma service. But surely that is nothing compared to those complaining they cannot get a BT one?!? . Rather this than customers complaining in their droves.

    We know you cannot please everybody , so we start with existing customers first. New customers and expansion come second.

    This has worked for 15 years as a business in a sustainable way. It is a shame we have had to suspend expansion plans while this fiasco exists. But it does mean we are instead investing heavily in upgrading our infrastructure (again) for existing customers benefit.

    Bill

    1. Avatar fastman2 says:

      West Sussex has 3 exchanges that BT refused to fit ADSL too (not viable they said). All 3 exchange areas are covered by Kijoma, including those who would be on lines too long for ADSL and definitely too long for FTTC (although they have 1 cabinet between them, the rest are all EO lines

      Actually WSCC decided not to upgrade them abour 5 years ago – but lesat not the facts get in the way

  7. Avatar fastman2 says:

    there was a bid to upgrade them to ADSL and that was not successful

  8. Avatar PeterM says:

    Nutbourne is on the West Chiltington exchange in West Sussex. It has been upgraded to fibre but as it is about 1.5 miles from the cabinet that supplies it, only ADSL is available. The West Chiltington exchange is located at the Storrington exchange. Following the line by road that the phone cable takes, Nutbourne is located about 4 miles from the Storrington exchange.
    There are no plans, at the moment, for any upgrades to the West Chiltington exchange area.
    Customers can expect speeds of less than 2Mbps on ASDL at best, but a Kijoma speed test of just under 20Mbps is recorded by Think Broadband beyond Nutbourne in dial up land.
    The point of this ramble is simple. If BDUK runs Kijoma out of business, who is going to give this customer and probably 100’s more, the same level of service as they are currently getting?

    1. Avatar dragoneast says:

      Isn’t it the age old problem with any Government intervention, it distorts the market? The neighbouring town gets access to a motorway, mine doesn’t; we’re at an unfair disadvantage.

      Since some residents have bought a commercial solution, why can’t the rest of them do so if they’re that concerned? It’s the BARN solution. I was in this situation; I bought a Fixed Wireless solution when ADSL was inadequate, then BT came along with VDSL. The Fixed Wireless service has survived, playing the game to get both commercial and public support over its growing network – it tries not to go around upsetting people; I now have both.

      Politicians always try to bribe (enough of) the electorate – never all of them, difficult cases are a nuisance, except for their publicity value, occasionally; the law tries to restrain them (inadequately) as best it can. Meanwhile if you want something the only sure way to get it is do(support)-it-yourself, as ever. Why should anyone else go out of their way for your benefit? Only if there is something in it for them.

    2. Avatar NGA for all says:

      @dragoneast I understand your perspective but I think Parliamentary committee oversight has allowed the NAO and BDUK to formally identify BT 38% inflation of costs in their models. See clause 3.7 in the NAO January report.

      If the new batch of rural MPs have the appetite then forcing proper oversight of the state aid measure should 1) force proper sight of the gap funding model, 2) BT pays is allocated share of allowable costs and 3) the use of SEP contracts to reduce BT’s commercial investment is acted upon and reversed.

    3. Avatar TheFacts says:

      @NGA – and the rest of 3.7 says?

    4. Avatar NGA for all says:

      @The facts – the rest of 3.7 as would be expected has some mitigating comments about costs being more expensive later in the process, while the Scottish Audit office report argues the opposite, up front planning, handover points will mean average costs will fall. Given the mitigating arguement can be anything that suits the moment, the inflated costs have been found and recorded. The mitigating arguement gets you across a line until the next NAO report. The next report we hope can include a record of BT’s capital contribution.

      While the average customers served will fall, the economies scale of should be visible through to at least 90% coverage.

      What proportion of the total project costs have BT paid in West Sussex to date?

    5. Avatar TheFacts says:

      @NGA – 38% or 25%?

      ‘BDUK estimates that this £142 million variance reported so far is likely to be reduced by between £30 and £50 million. This is partly because of timing issues, as BT’s financial model profiled average unit costs, rather than profiling projected specific unit costs. There are also some possible further costs not yet charged by BT. But even if all of these costs materialise, BT would still have spent approximately £92 million (25%) less than its contracted forecast cost.’

    6. Avatar NGA for all says:

      @The facts – as I say the commentary is a post event justification. Cost Models were inflated, which was previously denied in Parliament. The commentary changes to match the message needed – see the Audit Scotland report for the inverse arguement.

      In West Sussex, BT contribution was supposed to c£12m or £4m in capital in phase1. It would be good to see the latter deducted from what should be no more than the cost of 300 cabs for phase 1 in West Sussex, just about the BDUK allocation of £6.2m.

      Hopefully, the new Parliament will focus on the application of the state aid measure, building upon the focus on costs during the last 2.5 years.

  9. Avatar FibreFred says:

    A nice sound bite blaming BT but surely they are only building within the bduk framework?

    They can only use bduk funds where bduk and the la says they can , sounds like bduk is to blame

    1. I’m with you on that one Fred 🙂

    2. Avatar PeterM says:

      A valid point but BT and BDUK have a symbiotic relationship when it comes to rural broadband. It is difficult to see how any of the altnets can gain any market share in West Sussex and I guess that applies to most of the country.
      When it comes to BDUK3 we will see that it will be impossible to provide fixed Wireless Broadband to the remaining 5% simply because the areas to be covered will be so fragmented. The poor s*ds will be left with satellite broadband.

    3. Avatar dragoneast says:

      Trees, existing and new buildings and hills also obstruct Fixed Wireless broadband apart from, and more often than, BT. Should they all be regulated or got rid of too? And should Fixed Wireless providers themselves be specifically regulated and forced to provide services as a utility, and ensure their signal sectors remain uncongested?

      I really don’t understand the logic that because one Fixed Wireless operator feels hard done by, every other Fixed Wireless operator must be the same. It’s not my experience, but then I don’t have an axe to grind. The argument seems to be that customer choice is fine, provided it’s for other people’s customers – the oldest argument against competition in the world. That battle was lost in the 1970s.

    4. Avatar NGA for all says:

      The submission of the coverage maps during the OMR, and Sussex acceptance or rejection of you as a viable supplier is key. ‘Viable’ tests were defined in the guidance but that should be clearly indicated to you or you may have failed to respond to some specifics on post code data, particularly plans for planned coverage. There is also a clause within the state aid measure 33671 which permits notification of new coverage so private investment can be protected. I am certain Gigaclear have needed to use this.
      Acceptance of your maps and plans means you effectively become a supplier of last resort for that community for broadband, so Councils need to be pedantic, they will not get forgiveness if they get it wrong.
      This is an issue between the company and the council.
      The BT issues are separate, but be aware that West Sussex phase 1, like all the phase 1 budgets are pumped high so that the c320 cabs will absorb c£8m of the subsidy, so a whole load more build is possible if the funds are managed well.
      If you wish to be supplier of last resort for broadband in some of these areas go back with your maps and plans, the backing of the community and make your case. The state aid clauses will permit it.

    5. Avatar NGA for all says:

      @Bill, I know its hopelessly idealistic but if West Sussex have paid for USC with BT, then at saner times BT might have used Kijoma for in-fill. A willingness to use local partners certainly featured in the requirements.
      That conversation might be worth having but the available funds and those emerging from clawback will be large.

  10. Avatar Bill Lewis says:

    Interesting comments on here. With respect to feeling “hard done by” , that is not the point raised here. The issue as i see it is many within the county are not receiving any Fibre build as part of the BDUK process . These areas have no other choice basically apart from satellite.

    WSCC are informing these people that they cannot spend the money there as Kijoma provide a service , even though we have declared we do not to the individual cases we have been involved in. We are being used as an excuse.

    On the flip side places that have nearly complete take up and coverage from Kijoma and have had for over 10 years , which includes all three of the non ADSL exchanges in the county, are having FTTP run everywhere over many miles of spread out small hamlets etc.. They had to run that fibre miles to even reach the area.

    The cost of this well exceeds the costs of putting in an FTTC cab next to an existing cab as most of the un served areas would need.

    The reason this has happened is a decision by WSCC before the start of the BDUK process to exclude any provider outside their clear “BT strategy” , responding to the BDUK OMR’s as we did had no positive effect at all and it wouldn’t as the decision had already been made.

    This is about mis-use of public funds / state aid to the detriment of those who need it, in order to spend it over building a very good service.

    Feel free to check customer speed reports on think broadband for the PO18 9JE area etc.. , then look at those outside that area on other providers for a clear example.

    Compton, a location Kijoma do not cover nearby appears not to be even on the radar for Fibre build for example.

    Bill

    1. Avatar NGA for all says:

      @Bill – for clarity can you repeat the 3 exchanges where you have been overbuilt – Nutborne, West Chiltington and ?

      I am not sure this is any comfort to you but money will be there for Compton as well.

      I cannot comment on the councils tactics in either using you to talk BT into an area, or to use you as an excuse as to why they are not going to a place. There priority will be trying to keep BT resource in West Sussex and not diverted elsewhere, avoiding overtime payments.

      The latter suggests they are willing to acknowledge your service and thus should be included in their mapping. If they map your service and publish it, it is acknowledged. If not their argument will not hold.

    2. Avatar PeterM says:

      @Bill
      I find myself totally disillusioned with the BDUK process, our fibre upgrade has done little for me and although we have another cabinet just 500m away we cannot connect to it because their is no ducting.
      Obviously it is expensive for you to provide a service for a small group of properties but would you consider providing that service if we could provide you with a location for a mast and a good contribution to the installation costs.
      We are within your general area of operation with other Kijoma customers just a few miles away. Peter Manfield. RH20 2JX

  11. Avatar MikeW says:

    Overbuilding is a thorny issue wrt any operator, but those offering umbrella services (fixed wireless and 4g mobile) are always at risk of overbuild – especially as most consider the fixed wireline services to offer the best options for the future, and the politicians aren’t immune to that feeling, even while supposedly being technologically neutral.

    But BDUK seem to be officially condoning overbuild, even of grey or black areas, so long as it happens as overspill from giving coverage to white areas.

    A number of recent (i.e. SEP projects) specifications for white/grey/black areas now specify that “an area” will be considered white unless at least 90% of premises in the area can already get superfast services from Virgin. There’s a definite move to not risk leaving people out through small holes in coverage.

    1. Avatar NGA for all says:

      Crikey – is this guidance written down?
      1.) So much for hard to reach.
      2.) The impact on Virgins proposed £3bn investment.

    2. Avatar MikeW says:

      As I said, there are a number of SEP project OMR/public consultations that have an updated definition of an NGA white area. Same for the definitions of the phase 3 market test pilots.

      They tend to differ in some of the details, but they generally cover the cases of
      a) Partial coverage;
      b) Overlapping coverage by multiple operators;
      c) A combination of (a) and (b).

      Requiring an area to have at least 90% coverage of infrastructure seems perfectly sensible, if you are one of those people not covered, or infuriating, if you are a provider of 89% of the coverage.

      It isn’t helped by a non-definition of “an area”, which allows the statistics to be suitably bent depending on persuasion. For the purposes of mapping, and for easy lists, a post code is one way to define an area. But when BT is involved, is it better to define an area as the service area of a cabinet?

      Of course, where deployment of, say, an FTTC cabinet is allowed under these partial/overlap rules, subsidy can only be claimed (on a per-premise calculation) from the properties that were actually sub-superfast. Likewise the government statistics (on number of properties passed) are compiled using only the properties that started sub-superfast and moved to superfast.

  12. Avatar Bill Lewis says:

    it is good to see the official response from the council. Kijoma needed to provide evidence of individual properties, they demanded our business plan, finances, projections etc.. too.

    They also stated that even if a single property was not covered by our service in an area then they would discount its existence for the whole area.

    The point is it was way before the BDUK process that they had decided to exclude us from the equation. the rest is pretty much the plans for Arthur Dents house destruction in Hitchikers guide.

    Bill

    1. Avatar MikeW says:

      A slow response from WSCC there – but surprising it came out before the election!

      It looks like WSCC were being particularly harsh on Kijoma in the early days; this attitude doesn’t seem to have extended to my county. Now we’re getting to the later stages, the FWA operators are becoming a key component.

      However, for me, one particular element of WSCC’s response stands out: “We have heard since from communities who have challenged Kijoma’s declared coverage of areas where a wireless supply of broadband is not available.”

      This matches evidence (anecdotal, obviously) I have seen online, with people complaining that they never get a response from Kijoma when asking about a new connection. In these complaints, Bill’s response is that he puts his company’s effort into supporting existing customers first – which is as close an admission of “we ignore prospective customers as a waste of our time” as he ever appears to get.

      To my mind, the idea of good customer service applies equally to prospective customers. Ignoring these people (whether their area is not covered, or the network has insufficient capacity, or through laziness or overwork) is tantamount to saying that their area is not covered.

      Unstated in the requirements from the EU, or from central government, or from the councils, is the basic fact that for an area to count as covered, the operator claiming coverage has to be willing & able to accept new customers – and to be willing & able to deploy new equipment if necessary. Without this, all the complicated technical stuff involving laws of physics behind DSL range, or radio propagation calculations, or network capacity loading, is moot. Refusal of service inherently creates an “NGA white area”.

      This consideration applies to BT equally: If they filled up an FTTC cabinet, and refused to stand an additional cab – then they can no longer be considered to cover the area. (No, Walter, I don’t think that only partly deploying cards or tie cables counts – provided a timely upgrade subsequently happens). Or where the estimate tool says the line is too long, and CS droids tell you that you cannot order.

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