Budget broadband provider Exetel has introduced a number of changes to its plans recently, declaring that due its low prices, it has no "'reserves' to deal with adversely changing circumstances in the Australian economy".

Most interesting is the introduction of a $3/month "administration fee" in lieu of price rises. The fee applies to all DSL customers and replaces a $1.10/month fee that credit card users were paying.

Other changes include an overhaul of its plans, reducing the number and increasing the average price, and a change to the way the shaping system operates. Previously, shaped users had their speed reduced to 64Kbps after their limit. Now, if the user goes more than 2GB over the limit while shaped, they will be charged $6/GB from that point on. Exetel says this is to stop "abuse" by a small number of customers.

Most users appear to have no issue with the shaping change, though concern has been raised that the shaping often does not work immediately, increasing the risk that someone could accidentally put themselves more than 2GB over their limit.

Despite the negative changes, Exetel has provided adequate notice and is allowing its customers to transfer to another ISP "consider this fee increase constitutes a significant variation in the terms and conditions of the supply of services to you by Exetel".

Exetel is well known for its no-frills offerings, with limited "value adds" and a large amount of automated systems to reduce costs. The ISP's management has also made no secret that it doesn't intend to entertain customers that offer little chance of profit.

For example, Exetel occasionally identifies customers that are less profitable (due to high support costs, high data usage, service troubles or complaints) and terminates their contract, giving them 30 days to switch to another ISP. It would rather lose the customer than to continue to lose money on them.

No-one can argue that it makes great financial sense for a business, but to a populace used to businesses making all efforts to pacify customers, it can be a shock to the system.

Exetel is likely to be only the first of many ISPs to begin reacting to worsening economic conditions.