At long last - Karoo monopoly is changing

March 18, 2008 · Filed Under Internet

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

For those of you who don’t live in the Hull area, Karoo is our ISP, and yes, I’ve blogged about them many times, being over-priced and under performing. Perhaps this would not be so bad, if we had a choice of ISP, but we don’t. That is what I call a monopoly.

Well, the good news is that it looks like it will be changing soon. The article on the This is Hull and East RIding website says that at long last, other ISPs are going to be allowed to provide rival services -

“Telecoms firm Kcom today opened up the door for rival broadband operators to enter East Yorkshire.
The Hull-based business has slashed the cost of its network charges, which could see other Internet providers compete for customers in the company’s own backyard.
The move will be welcomed by thousands of people across Hull and the East Riding, who have long complained about the lack of broadband choice in parts of the region”.

The problem in the past has been due to Kcom (the telecom company that runs Karoo) has deliberately kept network charges high, keeping rivals out of the area by making it too expensive for them to start providing a service. This is superb news and by the looks of the 38 comments on the article, everyone else is also very pleased!

For far too long, the Hull and East Riding people have had to put up with poor speeds and massive overpricing from Karoo. I really hope this is about to end.

Technorati Tags: hull marketing, karoo, karoo monopoly

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.

Start Slide Show with PicLens Lite

Tags:

Comments

Comments2008-03-18+17%3A08%3A59mossman to “At long last - Karoo monopoly is changing”

Sam on March 18th, 2008 10:41 pm

I’m glad to hear that things will be changing soon, Jon. I’ve read your other posts about the ISP monopoly and it must be awful to be tied into something without having any choice in the matter

The price you pay for the speeds you currently get is shocking, especially when there are so many great deals around with other ISP’s.

Hope it comes for you soon!
admin on March 18th, 2008 11:17 pm

It has been a long time coming….. I’ve spoken to their PR department and Marketing department - all very friendly, but they never admitted that their service was an over-priced monopoly.

I’ve seen a recent offer from be there ISP (I think that’s the name) that gives up to 24mb for £22 a month! Now that is value.

What really annoys me is the marketing langauage - “up to” x mb is always used so they can always wriggle out of any complaints of slow speeds. I am supposed to be on an 8 mb line - I am lucky to get 4mb! Grrrrrr……
Adam on March 19th, 2008 2:44 pm

Don’t hold your breath, this is very much a smoke and mirrors exercise from KCom.
The question there is WHY their price has been higher for this time?

The problem we now have is that other companies can come in but only if they are prepared to use KComs lines to provide the backhaul to the internet. This will mean you will have the same problems we have now, ie. crap connections with poor bandwidth.
No company (thinking Sky, Virgin etc.) will come in if there reputation is at stake.
So what will happen is that either no one will come to Hull, and KCom will say “i told you - no one wants to provide services!” or a few firms will come and hit the same problems (poor quality) where KCom will say “i told you - we are just as good as they are!”

The rest of the country is using BT Openreach as a single infrastructure platform, so the whole of the country is on a level playing field apart from Hull…
This is the main problem that needs to be addressed. Until that happens we will always be a backward (technologically) and high tech industries (how many does Hull have? hmmmmmm) will avoid this City…
admin on March 19th, 2008 3:59 pm

Hi Adam,

I think you could be right, having thought about this some more. Our infrastructure is in the dark ages, so you are spot on saying we are not on a level playing field. We need some serious ££££ spent on the network.

I am sure the situation doesn’t help attract big investors and high tech companies - I think you have nailed it here. What big companies are in Hull? Reckitts and Smith & Nephew, and the latter won’t be here much longer, with the well-publicised (and hushed up) plans to move production and manufacturing to China as soon as physically possible.

We are a million miles away from Leeds in terms of growth, opportunities and quality of life. Very sad. Kcom should be ashamed, as they are not helping.
Adam on March 19th, 2008 4:16 pm

;o)

your observations are totally correct.
You can count on a couple of hands the number of high tech companies in hull..

Its just too expensive to do business now, and with the reduction (!?!) in connection charges KCom announced the other day they also hid the INCREASE in charges they will be forcing upon business users.

There is a public meeting coming up with Diane Wallis (MEP) that will look at this issue (price, business etc.)
Hopefully we can get some way forward.
admin on March 19th, 2008 4:21 pm

Adam, can we, the public attend? We should try to, perhaps as press / bloggers - would be interesting and perhaps we could get the point across in a convincing manner!
Ian on March 21st, 2008 10:51 am

Hi,

I’ve been following this blog for a while, and am kind of tempted to chip in here… this topic strikes a chord.

I understand both sides of the argument, and I would love to see competition to Karoo as I believe this would be healthy for KC and for its long-suffering end-users.

From the KC perspective I can understand that a combination of a long-term lack of investment in infrastructure / R&D and years of poor management has left Karoo something of a lame duck, and as a wholesale provider of broadband access KC has historically not focused upon wholesale IP/ISP business (in Hull - nationally there has been KBC, inbusiness and now Affiniti).

The regulator is satisfied (!) that KC meet their obligations and so this situation where KC charges almost retail prices for wholesale services has continued without challenge. The lack of competition has allowed KC to grow apathetic and their ISP ambitions have become stagnant. Competition in Hull would either naturally end Karoo, or would re-ignite this part of their business, both being pleasing outcomes for end-users.

Historically KC pioneered new communications technologies (digital exchanges, video on demand, network hosted PBX services, non-geographic numbering services) and certainly for UK broadband held a 75%+ market share during the 1990’s as a result of early investment in xDSL technologies (e.g. KIT). This is not a terrible company by any measure… just one that’s been allowed to lose its mojo

From a commercial perspective the business of running an ISP in 2008 with the expectations of end-users for performance and price is simply not compelling unless you’re considering a multi-play offering, intend to subsidise the broadband access business in some way or are looking at non-DSL local loop (I’m thinking wireless here). Broadband revenues quite often will not cover the cost of doing business until you hit 30,000+ end-users (economies of scale for access into the exchanges mostly cause this) and so it is a tough sell to establish a competitor, even on paper. It also goes some way to explain, but not excuse, the high prices from KC and why it is difficult for them to justify ongoing investment in the local infrastructure.

Factor in the geographic location of Hull (essentially you need to take KC + BT capacity back to Leeds and then Manchester or London to connect the local infrastructure into “UK.net” and the wider world) and the kinds of business and consumer audiences that are available in the area and it becomes very difficult to construct a compelling business case, the costs will be prohibitively high and the addressable audience is seeking a low-cost alternative. High risk!

OK, probably went on a bit there… my point in summary is that it could be really healthy for KC if they genuinely want to embrace competition and re-energise the local ISP market in East Yorkshire, however the multiple challenges faced by potential competitors probably kills the business case for “entering Hull”.

This blog seems to touch on “local” issues but with a “global” perspective… any local business people thinking of establishing a competitor to KC please get in touch. I would *love* to be involved in some way to build a high performance alt-net broadband business in East Yorkshire:

http://www.linkedin.com/in/icleary

Cheers, apologies for length etc.
admin on March 24th, 2008 10:42 am

Ian,

A huge thanks for such an informative and interesting reply. You raise some very valid points! I think they almost in a bit of a vicious circle - yes, it is high risk, but they have got to do something! If they don’t, they, and the local area are in big trouble.

You’re bang on with the statement they have “lost their mojo” - a simple three words that sums it all up. Their top people should be ashamed of themsleves.

Lets hope that they do embrace the competition and the Hull area can pull itself back into a world which requires good value and fast broadband, both for the public and, probably more importantly, for business.

Jon
Tim on March 31st, 2008 2:52 pm

http://karooforums.net/index.php/topic,212.0.html

Entanet Marketing are asking for a show of people interested in them (enta are one of the best most widely held in great esteam BTland providers there is).

GET OVER THERE NOW AND POST if you want Entanet - THIS IS IT !!!
admin on March 31st, 2008 2:57 pm

Thanks Tim, will have a look now, and do a separate post shortly!
Tim on March 31st, 2008 5:13 pm

Thanks for taking a look Jon and posting - I really think with a bit of luck we can make a great case for Entanet to take a serious look at our City and once they’re in it will attract more and more alternatives
Adam on March 31st, 2008 5:47 pm

Hi there,
while your across at karooforums.net can i ask you check out the topic titled “What would you pay to get a new service ?”

Its on a sticky link at the top of the site.
The poll is really, really important. It allows the site to have hard evidence of the level of commitment the population of Hull have towards any new provider. The results can then be used as hard evidence when approaching any would be providers.

link to poll:
http://karooforums.net/index.php/topic,206.0.html

Thanks once again..

Adam
admin on March 31st, 2008 8:44 pm

Adam, just filled in the poll, thanks for the heads up!

Tim, we just need one more, and then things will change! Their must be people / companies looking at us - there IS an opportunity for someone to provide a good service and make a profit.
Pissed of Karoo Customer on July 15th, 2008 12:58 am

It is now july so it has been 4 months since this article was printed and yet ther has been no change
I (and every other Hull resident) can not get any other broadband other than karoo. and karoo have updated thier packages but thier worse now i can switch to a 12.99 (3 month trial) and save a bit of money but after the trail it goes up to 16.99 which is what i am payin now but the big f***in laff is the new package has a 10GB monthly limit!!!
admin on July 15th, 2008 11:49 am

I hear you! I’m still paying the frankly ridiculous £29.99 a month

And with the news today that BT are looking towards rolling out Fibre Optics, I wonder what Karoo will have to say…. I will be speaking to my contact shortly and will report back.

Thanks for posting.

Jon