Is Tesco Broadband as good as their Value Baked Beans?
July 12, 2007 at 12:29 pm
It was only a matter of time before Tesco joined the world of the Internet Service Providers (ISPs). Tesco began in the 1920s as a mere market-stall in London’s East End and has gone on to control over a third of the UK’s grocery market, notching extraordinary profits of over £2.5 billion in 2007 alone. Tesco plans to conquer the US has secured 100 sites ready for the end of 2007 for the US version of a Tesco Metro called Fresh and Easy. Tesco now provides: insurance, car breakdown, credit cards, DVD rentals, travel, savings, loans, phones and even contact lenses…but what about the internet market?
ISPs are a very tough business to crack. Although nearly every home uses the internet, this doesn’t make it any easier to convince customers of which ISP they should choose. Everyone seems to have gripes about their particular service, so why did Tesco think it can do any better? For a start they only do so much. NTL provide the infrastructure and the actual service is carried out by a BT line, so Tesco (like many others) are merely the middle-men. This means that if there are any problems with the connection, which almost all ISPs face, then Tesco can actually do very little about it and at a higher than average cost of 50p per minute for the helpline, would you want to phone them anyway?
Tesco offers a fairly average selection of broadband packages, starting with the Value package (complete with familiar blue-striped label so there is no confusion as to how much you’re spending) at £13.97 which is 512k speed and a 3GB limit. Then at the other end the Finest package (complete with more glamorous silver label) at £24.97 for 2Mb speed and no download limit. All services come with free modem, free connection and free installation, but require an operational BT line, which is an additional monthly payment if you don’t already have this. You are then tied to Tesco for 12 months, which isn’t standard practice for all ISPs as many give you the option to leave if you aren’t happy. Tesco charges you £100. Although the prices are rather expensive, is the actual performance satisfactory?
There will always be the odd niggling problem with ISPs, as every computer and customer is different, but according to Which? Online Magazine in a poll of 11,000 users, Tesco did remarkably well and was ranked 8th out of 28. This was much higher than the companies Tesco actually rely on such as NTL and BT. Strangely there isn’t an obvious reason as to why Tesco scored this high and why customers seemed content. The packages aren’t better, the connection’s reliability isn’t better and the prices certainly aren’t cheaper. Perhaps it’s just the familiarity that people like? Perhaps it’s the fact you can add points to your Clubcard? Perhaps it’s just the simple option? A recent book by Andrew Simms, entitled Tescopoly, describes supermarkets such as Tesco as “the economic equivalent of invasive species: hungry, indiscriminate, often antisocial and destructive”. Maybe the internet and Tesco have a few things in common then.
