BT revamps broadband discount scheme

BT has rejigged the discounts it offers ISPs on its broadband products.

From 1 May, ISPs buying either BT's IPStream or DataStream products for resale will no longer have to predict the volume of orders they expect to get over a 12-month period.

Instead of giving a blanket 12-month discount on an ISP's estimated volume of orders, BT Wholesale will apply the discounts on a monthly basis for the number of orders the ISPs actually place.

The telco has also changed how it applies the three different discount levels.

A BT spokesman said: "It's a bit like income tax. If you fall into the 40 per cent tax bracket, not all your income is taxed at that level.

"So, for example an ISP could have 10,000 customers and meet the requirements for one level [of discount].

"Increasing this to 10,500 would push it into the next level by 500 new customers.

"But they will only get the discount for the next level up for the 500 additional customers; the original level for the 10,000 customers remains the same."

BT has increased the discounts that ISPs receive on two of the three levels, from one per cent to 1.5 per cent on an annual spend of £2m, and from 1.5 per cent to 1.75 per cent on an annual spend of £8m.

The top discount rate of two per cent for an annual spend of £14m remains the same.

The changes follow discussions with Oftel last year, which expressed concerns about the original format of the scheme. BT said the changes would not affect its revenue.

ISPs such as Tiscali said the changes may be beneficial.

"These changes will have no impact on Tiscali, but it could prove an incentive for smaller and mid-sized ISPs," said a spokeswoman for Tiscali.

"Giving discounts on actual figures rather than forecasts is better and makes much more sense; ISPs who fail to meet targets might have had to pay some discounts back to BT."