UK companies are paying up to 28 times over the odds for some ISP services simply because they can?t be bothered to shop around, according to a BT-sponsored report on business and the Internet.
The Durlacher Quarterly Internet report has revealed an enormous spread in charges among ISPs, with prices for simple dial-up access ranging from #7 up to #200 a month.
?Some companies are basically taking advantage of consumer ignorance and charging the earth," said the report authors. "Registering a domain name is a good example. We have discovered ISPs making up to a 500 per cent profit on a extremely simple service which should cost an ISP no more than #50 to #80 to carry out on behalf of a client.?
The survey of over 300 IT and Internet decision makers also showed that, although 87 per cent of the UK companies questioned said that they were satisfied with their ISP, 43 per cent admitted that they had failed to do any research into competitors' prices.
Instead they chose to base decisions on reputation and hearsay. ?For most companies it is not a business decision. A lot of the time the responsibility for choosing an ISP goes to some middle manager with no IT knowledge, who wants to get the decision out the way with the minimum of fuss and hassle,? said Nick Gibson, an Internet analyst from Durlacher.
UK companies are not only accepting high charges but also believe they are getting value for money, according to Gibson. ?The survey showed 70 per cent of those customers in the highest cost bracket for modem use, #51 per month and over, expressed a high level of satisfaction in their ISP," he claimed.
Nor do Internet users appear to be worried about the quality of service they are offered. All the fixed link access users questioned said they were happy with the service offered, even though over 40 per cent had experienced connection disruption in the past.
?People do not know what to expect in the way of quality and it is very hard to establish just what level of service ISPs should be expected to provide,? said Gibson.
The main recommendation of the report is that ISPs should set up service level agreements (SLAs) and offer companies some guarantee of the speed and quality of the service they provide.
Neil Mellor, head of Internet marketing for BT, admitted that the company was preparing to introduce such measures in the very near future. ?As customers become better educated and know what is out there, they are going to want a better service," he conceded. "SLAs are going to be a big issue in 1998.?
But he added: ?Smaller ISPs that can?t compete with new standards of service may find themselves marginalised in the future.
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