AOL today announced their UK broadband service at 1p short of £35/month. Not only does it cost the consumer £5 more than most of the other offerings, but as they are based outside the EU, they won’t be liable for VAT, so they will pocket the 17.5% extra. AOL defend the higher price by saying there’s going to be some content exclusive for their users. Clearly the whole package will make them considerably more margin per user.
Interestingly, AOL will be offering subscribers a dial-up connection with the broadband subscription. They say it’s to allow their customers to access the Internet when not at home, some of the more-blooded current ADSL users might say it’s to substitute for when the ADSL connection goes down.