John Linton
For those who aren't familiar with the old term - "Umbrella Pricing" refers to setting a product's (or service's) price using the dominant supplier's pricing and discount from it. Such a pricing policy allows ease of setting because the 'copyist' doesn't have to do any thinking for themselves in terms of what to offer or how to price it - "what they do less 10%". The latest typical example of this was the pricing announced by Internode yesterday which is as unimaginative an example as could be found. It has been a part of 'competitive marketplaces' for at least as long as I have been aware of commercial pricing strategies and, presumably, will continue to be around for the foreseeable future. You can expect iinet to trot out the same examples of "new" umbrella pricing over the next day or so and, doubtless, Optus will do the same - the imagination bereftness of these companies continues to be mind numbing.
Based on a phone call I received yesterday evening - Telstra has begun a new marketing campaign to sell its "new" ADSL plans to its data base of other ISP users but it seems to be as unimaginatively based as the previous scripts given to the ultra-stupid telephone canvassers as previous campaigns. I tried to tell the caller that my current ISP already offered me much lower prices for more downloads on ADSL2 than he was offering on the "new" Telstra plan only to be told there was no such plan offered by Exetel and that I should read the ts and cs more closely. I said I ran Exetel and presumably as someone who had set the plan I might know more than he did about its basic offering at which time the line went dead. However presumably Telstra will now call every non-BigPond ADSL user and via the sort of inaccurate statements made to me will "persuade" some of the dumber people to change suppliers - otherwise why else would they do it? Just goes to show that PTB's advice to hucksters to "never give a sucker an even break" is alive and well a hundred years later.
When we modified our own ADSL plan pricing starting in October we reduced our pricing and increased the various download options and the "new" Telstra pricing, and the "new" Internode umbrella discounts from Telstra's pricing are still far higher for less than Exetel's "old" pricing but as I mentioned previously we will look at 100 and 200 'anytime' plans as well as what else can be done over the next few days. Bandwidth prices continue to fall and caching solutions continue to become more effective as our user base grows. Akamai and peering now regularly delivers a growing percentage of IP traffic with the new PeerApp boxes due to be commissioned over the coming weeks which are expected to double the current caching traffic and therefore reduce the cost of IP further in the new calendar year.
It fascinated me to read these comments in Internode's 'announcement' of new pricing, at least as they were reported here:
http://www.itnews.com.au/News/162361,internode-lifts-lid-on-wholesale-internet-costs.aspx
In the first instance the statements of "$200 per mbps" to deliver internet via Telstra versus "$110 to deliver it over ADSL2 via Internode" makes no sense whatsoever for anyone in the industry that knows what Telstra Wholesale charge for ADSL1 and ADSL2 back haul. I'm sure that Internode don't pay Telstra any more for ADSL back haul circuits than Exetel does, almost certainly less, and I know, for an absolute fact, that it isn't $A90.00 per mbps and I would also know, for an absolute fact, that Internode's ADSL2 back hauls don't cost zero. So not a very credible statement ipso facto. Then again, what public statement reported in the press is ever anywhere close to reality? Maybe the reporter misunderstood what was being said?
I was also fascinated by the statement that Internode buys Optus HSPA connectivity at "$A3,100 per mbps". That would mean that Optus are charging Internode a lot less than they are charging Exetel for HSPA connectivity and provides us with a very useful publicly stated fact to approach Optus with as it seems to me that Optus have outrageously lied to us about the pricing they have provided to us and obviously will now have to provide us with some massive credits and reduced pricing going forward. Then again perhaps I am using the wrong arithmetic. However it does seem odd to me that Internode, based on the published figures, seem to be charged much more by Telstra and much less by Optus than we are being charged for the same services. I somehow doubt that can be the case - but then I seem to be wrong more often than I am right these days.
We'll complete adding the additional ADSL2 plans to the web site today and do the ADSL1 plans tomorrow and also complete the business wireless broadband website and pricing by the weekend.
Oh well, as some French writer whose name I can't be bothered to look up once said: "Plus ca change, plus c'est la meme chose"