Surfers ride the tide of bargain broadband deals

It's fast, competition is furious and the fees are in freefall. It's boom time for broadband, the high-speed connection to the internet.

Last week, UK Online slashed the monthly cost of its broadband service to less than £10 - a move likely to spark a price war involving more than 200 providers, including BT and Wanadoo.

This follows cost cuts in the past two months from rival suppliers AOL and Virgin to well under £20 - prices that match or beat those for slower "dial-up" internet deals. Meanwhile, BT and cable provider NTL recently doubled broadband connection speeds at no extra charge.

Broadband take-up has been remarkable: as many as 50,000 new consumers are signing up every week, estimates Ofcom, the telecoms regulator.

Only two weeks ago, BT signed up the five millionth broadband customer overall - a year ahead of a target set by the company and the Government in 2002, when there were only 200,000 users.

Where once it was an expensive alternative to dial-up internet, broadband has turned into a wildly competitive market with cut-price deals galore. What's going on?

For the uninitiated, broadband provides fast internet access at up to 20 times that of standard dial-up connections, and you can use your landline phone at the same time. Faster speeds allow interactive video gaming, video streaming, music downloads as well as faster web surfing and email.

Crucially, prices began to fall in December after Ofcom ordered BT to reduce the charges for rival internet service providers (ISPs), such as Wanadoo, to gain access to its phone exchanges and offer alternative high-speed deals.

Throw in competition from ISPs such as AOL and Tiscali, which instead buy network space from BT to "resell" to customers, and from cable companies such as NTL, which pump services into homes on existing networks, and the price pressure is relentless (although BT still has 36 per cent of the market).

Where very recently the cost of a monthly subscription regularly nudged £30, it's now closer to £15.

"First-time users who have assumed that the costs are prohibitive will be surprised," says Jon Miller of uSwitch.com, a price-comparison website.

While competition has brought greater choice, it can also lead to greater consumer confusion. But with broadband deals costing the same as some dial-up ones, it's worth considering an upgrade in your internet service.

So where do you start?

Accessibility shouldn't be a problem: 93 per cent of the country can now gain access to broadband, and the black spots are largely remote rural areas far from an "enabled" BT exchange or cable network.

However, your choice of ISP may be limited by location; a number of BT exchanges, particularly rural ones, are yet to be opened up to rival providers.

For example, UK Online's speedy 512KB service, costing £9.99, is limited to London and Glasgow at the moment because UK Online does not have space in all BT exchanges. Meanwhile, cable broadband is limited to areas covered by NTL and Telewest, typically urban locations.

Work out what you want from the service.

For online shopping, web surfing, emails and picture downloads, you'll probably only need a broadband speed of 512KB - a bandwidth measured in "bytes" per second.

At this level, you can do all of the above at 10 times the speed of dial-up, with a range of cheap tariffs available (see the table on the page overleaf).

A 256KB service is also available but this is only five times as fast.

However, the real explosion in consumer demand has been caused by the cheap availability of superspeeds measured at 1 or 2 megabytes (MB). Average monthly costs for connection at this speed - enough for users to download music, video and film clips, and take part in online gaming - vary from £16 to £25.

But there are other factors to take into account. For example, some deals "cap" the amount of material you can download each month, measured in gigabytes (GB), and charge you extra if you go over this. Downloading music, watching movie trailers or downloading photos all eat into your limit. For most home users, 2GB will be more than enough.

Other deals let you download as much as you want but may tie you into longer contracts. Most ISPs - including AOL, Wanadoo and Tiscali - insist you sign a 12-month contract. But companies such as Virgin.net only tie you in for a month.

There may also be start-up costs to connect your PC or laptop to the internet - usually those of buying a modem. Some providers will do it for free, others may charge. Virgin.net, AOL and Madasafish do not have set-up fees on most deals, but some packages offered by ADSL4Less come with one of more than £70.

If you choose a cable deal, you may have to pay for part of the installation.

Check the cost of any technical-support telephone helpline. "Cheaper services might use a premium rate number at 50p or £1 a minute, while more expensive ones might have a cheaper local number for technical help," says Blair Wadman at uSwitch.

If you sign up but become dissatisfied with the service, you can move to another provider. Comparison sites such as uSwitch.com let you check prices and transfer online, and broadbandgenie.co.uk lets you scrutinise different deals. An agreement between most of the large ISPs last August has led to "self-regulation" of the switching process, requiring a transfer to be completed within five days of the user's request.

Also consider "bundled" services from cable pro- viders as these can be good value for money. For example, Telewest offers a package comprising a 1MB broadband connection, a phone line and free local and national calls at weekends, and 35 TV channels - for £35 a month.

Separately this would cost £15 for digital TV, £10.50 for the phone line and £19.99 for broadband - a saving of £10.49 a month.