The first signs of instability in the broadband market appeared this week, according to reports on the BBC, with the collapse of the little known ISP, ET Global Solutions. The firm has been pushing cut-price, subsidised broadband solutions which, as many had expected, have proved unsustainable in the current climate. The hope now is that this isn't a sign of things to come.

The company had set out its stall offering broadband packages priced around the £18 mark. This was considerably cheaper than the general market wares, which are closer to £20-£25, and there was good reason for that: ET Global Solutions had slashed its profit margin to the bare bone in the hope of grabbing market share from the heavyweight soon-to-be market incumbents like BT and Freeserve.

Obviously this is a strategy that has failed quite miserably and its customers are now having to turn to fellow cut-price broadband vendor GIO Internet which has come in to pick up the pieces of ET Global Solutions' customer base. This might prove something of a fillip for customers who may be reassured by GIO's slightly greater trading history. ET Global Solutions was something of a start-up, coming to market young, with fresh ideas and a fresh approach.

Quite where the company went wrong is something we may never know. It seems that it just never managed to balance the profit margins with its customer base and, when you're a young company, that's something that you can't afford to do. Especially not in this cut-throat broadband market. You have to get it right first time or, as this demonstrates, you'll go out of business pretty quick. Investors and customers have little patience for a technology firm that doesn't deliver.

Britain has already been through a debacle of this nature once or twice over the past couple of years. Most notable was the collapse of ISPs that were offering flat rate and unmetered access packages on dial-up. In this case they too were touting cut price, subsidised packages in the hope of building up a user base that, next year, it could charge the full price.

Unfortunately those scales were never balanced and the fall out had a devastating effect on Internet take-up and added to the misery of the general dot com collapse.

Obviously, the industry as a whole has learned some harsh lessons since then and we can only hope that few make the same mistakes as ET Global Solutions. But this might be the start of some minor fallout as is always the case when new technologies emerge. Let's just hope it isn't as bad this time round.