John Linton
I've never understood what the attraction of "pre-paid" mobile, telephony or data services was to the customer - the concept is very attractive to the seller because of the obvious reasons of no credit risk and cash flow 'injection'. Not ever having any understanding of the prepaid concept made it as hard as ever for me to understand why the Telstra announcement of pre-paid NextG was of any impact on anything:
http://www.itnews.com.au/News/NewsStory.aspx?story=84893
I was interested that the 'over the counter buy price was really attractive and as I read this brief article further the pricing became absolutely amazing:
"Customers will be able to buy a $149 pre-paid wireless broadband pack, containing a USB model, a Telstra Next G SIM card and $10 start-up credit. The modems are pre-loaded with self-installing software that runs on
Windows XP, Vista, 2000 and Apple Mac."
compared to the, literally, cost price of $195.00 that Exetel have to charge for the same hardware. As the retailer must be getting a substantial commission to handle these sales it makes the price that Optus are charging for the HuaWei stick way over the top. (Recently I was looking for sources of U169s which are becoming available from various overseas companies at prices well below $A50.00 which makes the price offered by Telstra to end users as expensive as you would expect but makes Optus pricing to its wholesale customers an incredible rip off).
What puzzled me was the cost of the data usage which seems to be a fraction of the price that Telstra charge on their post paid nextG service:
"Customers
will be able to purchase variable re-charges, from $20 through to $100
for an effective allowance of 6GB of eligible data each month."
Am I reading this correctly that data on this service is around $16.00 per gb compared to the Telstra post paid plan price of $60.00 for 1 gb? A quick search of the BigPond web site doesn't enlighten me.
But I became even more confused when I read this:
"By comparison, 6GB of data costs $70 with Optus Pre-Paid Wireless Broadband; $100 will purchase 9GB of eligible data."
If this is correct then Optus is selling HSPA data at a retail level at a fraction of the cost it's selling the same data to Exetel for - about 50% at customer retail which would make it around 30% of what Exetel pays at the likely retail store buy price.
Now I'm really confused. Perhaps it's long past time that I stopped kidding myself I can contribute to operating a small communications company and retire and take up a simple hobby in my twilight years - like bringing about world peace or finding a cure for all known cancer types or teaching George Bush to put a six word sentence together correctly and expressing a clear meaning.
What is so attractive about getting paid in advance for HSPA data that allows Telstra and Optus to sell it at a fraction of the price a post paid service is sold at? Is credit default so endemic at this level in this market that pre-paying is worth a 70% discount?
That can't possibly be the case so there has to be some other reason. Some guide to a possible reason could be Telstra's new 'offensive' against Optus' 3g roll out. there's more than a whiff of panic in Telstra's concerted efforts to try and portray Optus as not being able to roll out a 3G network and therefore couldn't roll out an "NBN". It appears to me that Telstra is hell bent on trying to portray itself as the ONLY company capable of building a 3G network and therefore the only company capable of building the NBN. That Quilty d***head is really cranking up the emotion in his language and sentence content in trying to 'rubbish' Optus' network building competence.
But back to the reality of today's HSPA ricing - I suppose the really good thing about HSPA/3G pricing like this is that it will accelerate the build out of additional HSPA/3G capacity because why on Earth would any dial up customer continue to use that service? Even at the 1500/256 ADSL1 level why would anyone continue to use ADSL1? Perhaps Telstra's unprecedentedly vicious attacks on Optus are simply that it is seeing its dial up customers 'flocking' to the new 3G services of its competitors. What other reason can there be for the vitriol pouring out of Quilty's poisoned pen all directed at Optus.
Irrespective of Telstra's latest 'dirty tricks' campaign against Optus' engineering and financial planning competence this latest 'chapter' of the HSPA 'wars' again illustrates that the cost of HSPA will continue to reduce and the speed will continue to increase making the remaining revenues from dial up customers a critically endangered species with the revenue from low end ADSL users only a 'heart beat' behind it.
I think I'd better re-negotiate my Optus buy prices to get something only 100% more expensive than they are selling at to pre-paid retail customers.