Ethernet connections with our dealers and resellers are currently proving to be very popular. They primarily target this product at companies that have 2Mbps leased lines or where the speed of their broadband no longer matches their business needs.
There’s good margin in Ethernet sales. They consist of long-term contracts that typically last for up to three years and upgrades for this seem to be extremely popular at present, which is of course very good.
We’ve had people that have been with us for five or six years with what was originally a 2Mbps broadband package and moved to 8Mbps lines two years ago and they’re now ringing us up saying they want to jump to 20Mbps lines.
We have a choice of networks and connect through both BT and Tiscali so we can offer very good coverage, and that remains a vital factor in our dealers being able to sell these products so well. It means they don’t have to shop around and we’re signing people up on longer contracts with that.
The price these lines are sold at depends on what services the customers require within it. It starts from as little as £10 per connection. Optimising it for voice and putting security on it see people prepared to pay up to £100 per month for an enhanced line where we’ve included an awful lot of services on it. It makes what was a very low margin product into quite a high margin product.
The revenues that our dealers and resellers make vary. They can range from £10 to £100 on a DSL line and on the Ethernet circuits it ranges from £150 to £500 depending on the speed of the connection. On traditional broadband they can make anything between £10 and £25, depending on what services are sold with it.
A lot of our partners are packaging up mail services and data back-up services, and security such as firewalls and authentication servers. As they’re adding all these services, it means they’re making an awful lot of internet connections.
There are a number of people offering these types of services and the technologies are becoming similar, being called various different things. What we’re effectively talking about is internet connectivity on copper and that’s aggregated or not aggregated, so all the DSL lines are aggregated and you’re sharing it with other people. The Ethernet over copper products are essentially the same technology but you’re not sharing it and you’re getting a dedicated line to yourself.
These products are becoming a real driver for businesses and it’s determining where people put their business. The areas that are 21CN-enabled in and around our base in Manchester are seeing a spurt in new start up businesses and those at the edge of town or don’t have
a 21CN enabled exchanges are finding it tougher
to attract new business.