First Utility to launch new broadband deals

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Existing First Utility gas and electricity customers have had the opportunity to sign up for one of the three basic packages since November.

Each package includes line rental and unlimited usage; contracts are a minimum of 18 months long for both standard and fibre connections.

The actual connections will be provided over TalkTalk's LLU network, but all the customer service, billing, and support will be provided by First Utility themselves.

New packages

The three deals they'll be offering are as follows:

	Package	Broadband	Contract term	Upfront cost	Monthly price
					Energy customers	Standalone customers
	First Broadband	Up to 17Mb Unlimited	12 months	Free	£18.99	£23.99
	SuperFirst Broadband	Up to 38Mb Unlimited	12 months	Free	£31.99	£39.99
	UltraFirst Broadband	Up to 76Mb Unlimited	12 months	Free	£34.99	£42.99

Note the difference in prices for those who get their energy from First Utility and those who don't.

The incentive to bundle is clear: while it's possible to get up to 38Mb fibre at a cheaper rate (see who can beat them here), as far as standard broadband goes they appear to be one of, if not the cheapest, out there.

Those who don't get their energy from First Utility will still benefit from permanently low prices - their standard and up to 76Mb broadband plans are priced to compete with special offers from their more established rivals.

First Utility told us they aim "to offer a simple alternative in a confusing market", so while there are no introductory offers, there also aren't any upfront charges. They also say that prices won't increase at the end of the contract.

That's a sly dig at some of their more established rivals, among whom discounts for the whole of the initial contract can often result in something of a shock when customers get their first out of contract bill.

Pay as you call

The packages above are sold on line-only terms, so customers will either need to pay for each call or add one of First Utility's call plans to their bundle.

The UK call plans only cover calls to standard geographic number (starting 01, 02 and 03); the evening and weekend plan costs £3 a month, while anytime calls will cost £7 a month.

Outside these times there'll be a call connection fee of 16p per call, then a charge of 10p per minute; 084, 087, 09 and 118 numbers will incur an access charge of 12p per minute, and calls to standard UK mobiles will cost 11.5p per minute.

Customers who have one of the UK call bundles will also be able to add the International Call package for another £5 a month, for which they'll get 600 anytime minutes to landlines in 40 destinations and a 75% discount on the cost of calling mobiles in those countries.

Utility service

First Utility aren't the only utility company to sell broadband: SSE have offered some kind of phone and broadband services since around 2008, but really gained attention as an ISP in April 2015, when they offered two years of broadband free with their £12 line rental.

They ran another variant of the "free broadband" deal earlier this year, when they offered their fibre free of charge to customers who took one of their anytime calls bundles as well.

Similarly, First Utility have some history with telecoms: they've been quietly running a standard broadband service for some time already - and while the energy company launched in 2008, its founders started out with a phone company, First:Telecom, back in the mid 1990s.

Offering broadband and home phone services seems like a natural progression for energy companies to take, as broadband is increasingly - if not officially - thought of as a utility service that should be available to all.

In February last year, the US Federal Communications Commission officially reclassified both fixed and mobile broadband as utility services, coinciding with UK MPs calling for the Government to do the same here.

Bundling

But while the convenience of having all our services provided by one company might seem appealing, there are downsides - not least the impact it might have on competition.

It's a common tactic - and one that's often genuinely beneficial for customers - to offer discounts for taking more than one or two services.

But while it's convenient and often cheaper to take multiple services from one provider, it can make it much more difficult to switch if there's a problem or a better deal comes along.

Ofcom have been consulting on plans to make it simpler, looking at similar processes as they've brought in for switching landline and broadband - but those processes don't seem to take in the matter of separate contracts for each service, or moving just one or two services to another provider.

Consumer organisations, industry regulators, and the CMA have put a lot of time and effort into trying to show that competition - stoked by healthy numbers of us switching - is a good thing.

But two of the main perceptions of switching are that it's a hassle, and often doesn't result in any real savings - both of which could turn out to be more than justifiable concerns if bundling multiple products becomes more common.