Monday, October 12. 2009Broadband Pricing Seems To Be Increasing.........John Linton ......alternatively I need a refresher course in both reading comprehension and simple arithmetic. I spent some time over the weekend re-looking at the ADSL2 plans and going through a fairly detailed analysis of the various offerings provided by a number of ISPs with whom I think Exetel 'competes'. It is a laborious and boring thing to do on a weekend and because of that it takes more time than it should and is prone to error because of the difficulty in so many cases of interpreting the 'qualifications' to what appears to be said. However, if you apply yourself long enough to any task, and check the results sensibly enough more than once you will almost always produce a result. I obviously failed in one of those aspects of addressing this particular task as I didn't end up with anything usable and will have to start the whole process again today....not a great thought with which to start the week. I had expected, for no rational reason other than two years of statements in the media and hype from Pipe, that prices of ADSL services would have fallen by now from those ISPs who had helped Pipe through their financial difficulties and in return got 'incredibly advantageous preferential pricing' - as has so often been stated in the communications media I read most days of the week. If this has in fact happened then I see no sign of it at all anywhere. Unless my recent two analyses deceive me (and that may well be the case) the only thing I can see is that, if anything, the prices have increased slightly across at least four of those ISP's offerings - which can't be right - can it? Admittedly the 'included downloads' have increased. The other thing I noticed was the re-emphasis on "off peak" time with the dishonest depiction of "included downloads" being scummily depicted as a single figure when in fact at least half, or in the case of TPG up to 70%, actually being in an "off peak" period of varying duration and starting time....and of course there was the unlimited 12 hour period offered by AAPT with its amazing start time of 8 pm (which in all the years I have been associated with providing internet services is the START of absolute "peak time". I initially had trouble with working out why that would be done until I thought about how AAPT uses their owned network and that peak time for them probably ends before 8 pm so it makes eminent sense to use their owned network usage advantage against companies that are essentially data only service providers. So, having taken for granted that Exetel has enjoyed a marketing advantage in using the off peak period to benefit end users since March 2004 that is either no longer the case or of dubious value. Ignoring my deficient 'competitive analysis' it seems that the 'off peak' scenario needs a radical overhaul and some 'back to the future' thinking. I was very slow to pick up the AAPT rationale although Exetel has, since June 2004, used the reverse of that rationale to price our business plan offerings (our residential users required much more bandwidth in the evenings which left the business 8 - 5 period as basically unused for many years) thus making the data used in that period effectively 'free'. We have been offered/asked to be offered new pricing from the 5 providers we have some reasonable contacts with for new IP pricing based on different periods of the day and also just plain lower pricing for IP bandwidth to cater for the growth above the 3.3 gb of "contracted" IP bandwidth which together with the Akamai, Pipe and PeerApp contributions gives us a 4.8 gb "base" which we increment each month depending on growth. Our usual pattern of buying is to contract for the current level of bandwidth plus the estimated next three months growth on an annual basis and then buy additional bandwidth each month from a different provider to allow us to take advantage of the lower rates that occur every quarter that we have been in business. Steve is also working out whether we can expand the PeerApp boxes (or NetApp or some other provider) to provide for a more general caching solution than the one we used for P2P traffic for some 18 months before switching it off. The intention was to increase the time and capability of the off peak period but I can't see how that is now possible to even match the AAPT offering let alone do it better.....it appears to me that is a truly innovative offering with great appeal to most families and to many other types of user. It's only weakness is, of course, its cost and its 'peak period' configuration but that still doesn't give a lot to work with - at least as far as I can work out at the moment. I was very reluctant to 'give up' the marketing advantage of a 12 hour free download period and would still favour a return to that but the AAPT offering is a stand out differentiator and the low 'peak' download inclusion may well prevent the wrong sort of customers from taking it up - another clever idea if that's what it is and how it works out. If it didn't go against the very core of why Exetel is in business I would actually consider just copying it at a lower monthly price - maybe I can justify it based on all the ideas AAPT have 'copied from Exetel over the years? Now I come to think of it that may well be the way to go - it is genuinely innovative and has brought the first truly fresh concept to the market in .....I can't remember when. It would not be innovative for Exetel (just copying someone else isn't something I ever thought we would do) but it is hard/impossible to see how we can come up with anything better.....and they have pitched the price too high...as such a company would always have to. It would be ironic to copy a providers concepts for once having watched our providers pick up so many of the ideas that Exetel brought to the market. (one of the advantages of writing a daily blog based on what is on your mind at the time of writing is that it sometimes 'crystalises' your thinking in strange and different ways).
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A number of plans now count uploads, is it time to look at implementing some plans that do the same? Are uploads using significant bandwidth today with the use of P2P protocols? Do you think there is a market for people that don't use P2P protocols?
Comment (1)
It could reduce the impact of heavy P2P users in some circumstances but it has never appealed to me.
You could be right though that as time has moved on it is now more appropriate to 'charge' for all network usage in the light of the continued growth in P2P usage. Comments (5)
Why resort to ironic metooism. Please continue to be different and innovative!
Innovative and fresh IMO could be a Pay As You Use offering at a low 'monthly access' fee plus a low per GB rate that is truly competetive across the entire spectrum of plans. You are sooo deliciously very close to this milestone already! Provide a table that allows potential new (or existing) customers to compare their expected monthly data usage against the 'included allowance' plans of the competition. That is if they expect to use 5GB or 15GB or 50GB or 100GB data usage in a month they can be rest assured they will pay less than the equivalent competitors 'capped' plans in any instance. Push the point that if for some reason they use less one month, then they pay less (I have a suspicion that a majority of users do come close to their paid 'included allowance'). Or in the case they go over then it will not be the end of the world and a $1,000 bill! To boot a heavily discounted off-peak rate during the hours you feel is beneficial. Treat internet as a utility! Comment (1)
"Copying" (read: Improving) it would be a great idea - AAPT really haven't left much peak bandwidth to work with (particularly in larger households) - and where they do offer that bandwidth, the plan becomes $100/month + phone for 60GB peak.
Just remember though, like AAPT, you'll have some users happily downloading over 750GB off-peak each month. You can either deal with these users by charging 15c/GB off-peak ("at cost off-peak plan") -or- perhaps only charging that amount if they fall into the top 1% of users (a contract clause) -or- a no contract plan (with a setup cost covering break fees) and then simply issue a termination notice for such users. A no-contract plan may help increase ADSL2+ sales and is almost a unique feature in broadband ISPs these days. Comments (2)
The main catch (for me) with the AAPT plan is that you get shaped to 64kbps in peak AND off-peak if you go over the 5GB peak allowance.
Comments (3)
TPG (well, at least they used to - haven't checked lately) and probably other ISPs have this catch too.
Comments (2)
TPG don't at present, but being unable to pay for additional quota is annoying.
Comments (3)
Representatives from the film industry paid investigators to become customers and monitor the IP ranges of ISPs Optus, Internode, iiNet and Exetel for alleged copyright infringements, the Federal Court heard this morning.
http://www.itnews.com.au/News/157967,day-five-film-industry-monitored-internode-exetel-and-optus.aspx iiNet got the booby prize. Comment (1)
It always obvious what AFACT were doing.
Malone was irresponsible enough to keep running to the media telling them how wrong it was and making iinet the obvious court target. His personal grandstanding will cost iinet shareholders a great deal of money. Exetel avoided that by taking a sensible approach to what was a very difficult situation for a tiny company. Comments (5)
I guess that's why he sold when they are >$2.00 a share recently.
Comment (1)
I would be very surprised if the prosecution didn't use the example of Exetel and their automated infringement notice system.
It astounds me when I see press where it states that a system such as this would be cost prohibitive. Comment (1)
Perhaps they will use their experiences in becoming Optus, Internode and Exetel customers as some sort of 'evidence'.
Comments (5)
Have you considered offering some consulting to iiNet to assist with implementing a system similar to Exetel's?
They contacted Exetel regarding activity they saw on their Akamai gear, so they obviously know who you are. Comments (3)
Chris,
We would be happy to provide the code we use to any ISP who wanted it for the trivial cost we incurred in developing it. We have made that offer to the Federal Government 'officers' from Stupid Stephens department who visited us to discuss the issues of reducing copyright infringement. Comments (5)
Hmm, peculiar.
It seems Exetel profits from copyright just the same as iinet.... Who'd have thought? Comment (1)
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