The price of broadband has been driven even lower with Dart Internet launching a $26.95 ADSL plan on Friday.
Customers used to paying around $50 per month for an entry-level broadband plan started this week with the shock news that Telstra was now offering broadband for a low $29.95 per month. However, Dart, as of 3pm Friday, is offering its ADSL plan Australia-wide for $3 less – cheaper than some dial-up plans.
For $26.95, Dart will provide users with a 256Kbps/64/Kbps plan along with a 200MB limit. Excess downloads are charged at 15 cents per megabyte.
"This is built around acquiring new customers from dial-up," said John Austin, Dart's national consumer ISP manager.
He said the company does expect to lose money on this plan.
According to his calculations, if every customer used their full 200MB allowance, and not any more, the ISP would lose about $10 per month. "But nobody is going to use 200MB and stop there on a broadband connection," he said.
He calculated that if people used 500MB a month – 300MB more than the data allowance, Dart will gain an extra $45 per month per customer.
Customers are notified when they have reached their 200MB limit. They are also asked if they want to upgrade to the next plan in the Dart ADSL portfolio which is called the Economy 5000. This costs $48 a month and comes with a 5GB monthly download allowance.
Once customers upgrade to a more expensive plan, they cannot return to the $26.95 product, he said.
To join, customers have the choice of three set up fees, all of which are self-install. The first is $185 and comes with a USB modem. The $285 comes with a 4-port modem, and the wireless modem install costs $455. All modems are supplied by D-Link.
According to Austin, customers will be connected to the service in 8 days.
Austin said the best way to compete with Telstra is to take the telco head-on.
"Rather than go to the ACCC and complain [about Telstra's $29.95 plan] like other smaller ISPs, we have brought our launch forward and are competing with Telstra," he said.
Dart had planned to launch its $26.95 at the end of March after it had negotiated a better deal with its wholesale carrier Connect. But with Telstra's announcement of its $29.95 plan this week, Dart decided to immediately follow suit.
Dart currently has 4000 ADSL customers. Austin said he hoped to grow the business to 20,000 by the end of the year.
A list of Dart broadband packages can be found at http://www.ultrawave.com.au/products.php?action=soho