A broadband war has broken out with the launch of two deals offering customers free laptops, writes Ali Hussain.

AOL and Orange last week unveiled packages that come with free laptops - but only if you sign a two-year contract.

Carphone Warehouse, which is selling the AOL deal, said its laptop was worth £500. It has an 80GB drive for storage and 1GB memory. The broadband package it comes with offers speeds up to 8Mb with a 40GB download limit and costs £19.99 a month - £479.67 over the two years.

The Orange laptop is valued at £300. It has a quarter of the memory of the AOL laptop and half the storage space and a slower processor. The broadband is a quarter of the speed and the download limit is 20 times lower.

It costs £7.49 for three months, after which it goes up to £14.99. The total cost is therefore £337 over the contract period – £37 more than the stated value of the free laptop. You have to sign up to the Orange deal at a PC World outlet or opt for a £300 voucher to use instore.

Though both deals are competitive, they are for very different users. A heavy user who downloads films and often browses the internet should go for the AOL deal. Your laptop would not be delivered until September, however, although you can preorder the package now.

Carphone Warehouse, criticised last year for failing to meet demand for its “free” Talk Talk broadband offer, said people could preregister to avoid similar stock problems. It has already ordered 100,000 laptops, which will be ready to ship by September.

However, critics say the delay in delivery will mean the laptop is worth less than the £500 price.

“Technology moves fast, and in a month’s time, its value could go down by £50-£100,” said Aamir Baloch at comparison firm First Helpline.

The Orange laptop will be available to collect from PC World within 10 days of signing up to the deal.

If you already have a laptop, you could save hundreds of pounds by opting for cheaper deals.

Last week, Pipex entered the fray with the launch of a cut-price 8Mb broadband package that costs £8.95 for the first three months and then £14.99.

It has a 12-month minimum contract, but if you have this package for two years your total cost would be £349.14 - £145.61 cheaper than the AOL deal.

Plusnet, which earlier this month was named the best provider in terms of customer service by comparison firm Uswitch, has an even cheaper deal.

Its 8Mb service costs £9.99 a month, so over two years the total cost would be £245.75, if you factor in the £5.99 set-up fee - £234 less than the AOL deal.