Tesco cuts broadband package price

UK supermarket giant, Tesco has introduced a dramatic cut in the cost of its unlimited broadband package, which allows users to consume as much data as they want - for only £2.50 a month, IT Pro Portal reveals.

According to analysts, the deal that is extended to Tesco's 16 million Clubcard holders is primarily aimed at taking on rivals such as Virgin Media (VM). VM has also rolled out a similar low-priced, unlimited offering, in order to beef up its user base.

Tesco's broadband deal sees customers holding a Clubcard granted access to the budget broadband bargain, which costs just £2.50 for the first 12 months before reverting to the standard price of £6.50, Expert Reviews reports.

As part of the monthly cost, subscribers get a wireless router. While there is no set-up charge if a 12-month contract is taken, £40 is charged for those taking a 30-day rolling contract option. Speeds of up to 20Mbps will be available, Tesco has claimed, making it one of the cheapest high-speed connections currently available.

The deal is a direct challenge to BT, which has been offering broadband through some comparison Web sites at £3.50 a month for six months (subsequently £13 a month) on an 18-month contract, The Guardian says.

At comparison site Broadbandchoices.co.uk, Virgin Media, Sky and Orange all have broadband deals available at £5 a month, but at Virgin, this is limited to the first three months (before it reverts to £18.50 a month) and 12 months with Sky (reverting to £10 a month).