Sunday, December 27. 2009Wireless Broadand Wars - Part 4.....John Linton ........A New End Of The Beginning. I have been disappointed with Exetel's lack of progress in meeting our, admittedly ambitious, wireless broadband sales over the last six months of 2009. Everything we have tried to do hasn't achieved anything like the results we had hoped for and we are in the process of changing our approaches and the markets we are targeting almost completely. I scanned through the carriers offerings yesterday after seeing yet another "half price" ad from '3' on television and saw the usual cut price promotions and 'free' offerings which have become the norm since early 2008 and have moved in stages over that two year period with prices continuing to fall and data allowances continuing to increase. Our buy prices, based on our very small volumes, haven't changed since we started offering a wireless broadband service so the 'tolerance' we have to produce "new" offers/bundles/promotions is very, very limited. It will be interesting to see what the ABS statistics reveal about the growth, or otherwise, in the wireless broadband market when they publish their update some time early in 2010 and also what those statistics show about the wire line broadband market - particularly whether wireless broadband is eroding wire line broadband at the low end usage levels. Low end users, despite what anyone might gather from scanning the ISP pricing pages still, as far as I can see, account for 60% of all users - that's based on our user base which I am pretty certain is skewed towards higher end users. Our figures are irrelevant as we have such a tiny percentage of the total market but they are the only 'facts' I actually have - everything else (including the ABS survey results) is indicative but not precise. Although, at least in terms of coverage, '3' is the least attractive of the wireless carriers this latest offer of a 'free' USB modem and 3 gbytes of data for $A15.00 a month is very, very attractive: http://shop.three.com.au/broadband/Broadband-3GB#tbl_select_device?cmp=S0137 and it will be interesting to see what effect it has on the market which should be pretty easy to gauge - how long it takes for Vodafone to duplicate the offer using its own brand would be a pretty good indication of whether it is a success or not. I understand it is only for six months but then 3 gbytes for $A30.00 a month is still a very good price and the 'free' modem is also attractive. An effective offering of $A5.00 per gbyte sets a new low mark for wireless data and, even if it is for only six months (right now) it presumably is an indication of wireless price direction over 2010. The 'free' modem offers will become less attractive not only because a much higher percentage of notebooks and lap tops will have wireless chipsets built in but because with 3,000,000 or whatever the correct number is of USB modems already in the marketplace many wireless buyers will already have a modem or can easily obtain one for less than $A10.00 on eBay etc. Telstra continues to push its coverage and higher theoretical speed as the reason people should pay more for less but I wonder how sustainable that position is as 2010 plays out - it seems more than possible that Telstra's pricing of wireless wil come under the same pressure as did its ADSL pricing - it became unsustainable having been pushed beyond the tolerance of even their least technically ware customers. Far too soon to tell but I think that even their business customers who get 'special' pricing will begin to find it just too expensive...so their may well be competition at the lower end of the pricing offers from Telstra for the first time...and they are a lover of "half price for now..." offers and Optus 'me toos' that. So it's likely that some form of $A5-6 per gbyte will become the 'standard' wireless broadband offering between no and the end of February which will put even more pressure on the low end of the ADSL market (at least 50% of all ADSL users) not only because per gb it will be a better deal but because it continues the pressur already exerted by mobile telephones to get rid of the increasingly expensive telephone line completely - adding a further $A30.00 in to the cost savings for an increasing percentage of buyers. Although some ADSL users think high speed is the key driver of internet usage I very much doubt that's true. While there are a small percentage of "OMG my thieving downloads are taking forever" it is likely that their percentage is less than 10 - maybe far less than that. It is certainly true that more than 50% of Exetel's users would not download more than 2 gbytes per month and the AVERAGE download of our wireless users hovers around 1 gbyte per month. I think '3' have picked it exactly right in selecting 3 gigabytes as the included data allowance and have been very brave with their $A15.00 pricing per month for that download. I think it will put the feline amongst the grey flying things in wireless broadband land as we enter the new years but, to mix metaphors, will only be the first shot fired in the re-ignited wireless broadband war. We will now have to see what we can do to meet our even more ambitious 2010 wireless targets having failed so miserably in 2009. Trackbacks
Trackback specific URI for this entry
No Trackbacks
Comments
Display comments as
(Linear | Threaded)
Perhaps you can look at the possibility of doing away with the post paid WI A $5/month and 1.5c/MB plan, replacing it with 1GB for $5-6/month with excess at 1.5 or 2.5c/MB?
This would mean the WI B,C and D plans would need reworking. Paul Comment (1)
It's going to have to be something like that.
However our buy prices and our current user base (remember 90% of our users are on zero month contracts) make it impossible to do that. Somehow we've got to get round that problem without losing too much money - right now we don't know how to do that. Comments (5)
I you can get a sub $200 magic box some time in the new year I think it will help.
Comment (1)
Sorry that was supposed to read, " if you can... "
sorry about that. Comment (1)
There is a very big difference between the data service quality among the networks though, compared to wireline broadband. It doesn't really matter that much who you get your ADSL through -- you can get it at most homes in Australia now from one carrier or another, and the speed will be pretty good, all the time.
Telstra, on the other hand, does have a massive advantage over the other networks -- incredibly good coverage, and speed and latency that the other networks can't touch. (I agree that the theoretical 21Mbit/s figure is a load of BS, but at least the new management has stopped marketing that and is now using claims of 8Mbit/s real max throughput.) For most businesspeople, service quality is the key thing -- that they can actually get on and use the service when they need to, wherever they are. Many businesspeople (especially individuals, not fleet managers, I guess) don't care that much about $50 a month difference in price, if it means the difference between a good service or an unreliable service (which is, frankly, what Optus provides on its 3G network.) Comment (1)
Exetel has an increasing number of corporate customers who see no difference between the Optus network and the Telstra network most of them have moved from.
I use an Optus service in many places around Sydney and other places in Australia and have had no problems over the past almost 2 years. As far as I can see the "my network is better than your network" will go the same way as the mobile telephony story - if you begin first you will be able to say that for a while but after a time it simply isn't true...in my experience it isn't true now. Comments (5)
I'd submit $A8 pm might not be a bad place for these plans to start if combined with, say a reasonable 500mbytes allowance =earning Optus/Exetel some nearly five grand per 'Mbps' delivered. Then, Who ever is first to put into practice a "no excess charges" structure on wireless BB in Australia is bound to see customers sign up in feverish numbers: null routing consumers to 0 before they can accept ($4,000+) per mps 'the charges' would seem an excellent policy.
Thinking outside the square perhaps Exetel customers could go on a new plan called wireless Fusion. As I find my usage fluctuates some months on fixed broadband: it would be great to get offered '50 mbytes wireless allowance' in exchange for each 1 gbytes unconsumed of my prepaid/fixed line service. **I might use up 25 of 45 gb of my "TL-BC" in December'09 leaving 20 gbytes Unconsumed; so if I took up a revised "WI A" (with no contract/$8 pm/500MB) I could have, potentially, the 500MB (base) + a 1000MB (fused bonus) =1.5 GB total to download/upload wirelessly in January'10. For many users this would add up to a reduced gap between fixed vs mobile data usage, at least in some months by fusing these products together. Comment (1)
I agree that it's got to be something different and Exetel does have some sort of advantage in that our billing and database systems are much more 'controllable' than those of the carriers and it's something we must look at.
How this may be possible is going to be the problem but that's what small companies have to do....and have the capability of doing. Comments (5)
It would be interesting to see the response to a large scale advertising campaign based around something similar to what Vodafone had as their 'no plans' plan. This voice plan had no included credit, with voice being simply 1c per second. In other words, you only paid for what you used.
They found that without a minimum monthly spend, it was costing them, but they got a huge response from people who wanted something 'simple'. They introduced a flag fall to fix the problem of really short calls which weren't being covered by the revenue generated for the call. Something similar from a data service I would imagine would sell really well. Make it something like a minimum monthly charge of, say, $5 (Either without a commitment period or 24 months with a free modem), then something like the $8 per gig mentioned above. I know a lot of people (like myself) that would love to get into something like this, but are afraid that in 6 months, this will either not be enough data, or not suit them anymore. In summary, very small 'token' connection fee, then pay as you go for data. Kind of like a prepay deal, but billed. My 1.5 c worth. Comment (1)
Mr Linton, I have a question regarding the way the Optus network works - please feel free to disregard this post if it's not appropriate for publishing.
Do Optus provide HSPA services on the basis of per-Mbps pricing, per-MB tarrifed pricing or some combination of the two? The fact that you've stated that HSPA poses difficulties in promotion, productisation and so on tells me that there's something very different about the way the product is priced. Regardless of this, I'll be changing over my own HSPA service and those of my fellow sysadmins to Exetel services on January 4. The static IP you offer, coupled with a service that will transit peering networks as required makes it a no-brainer. Comment (1)
We buy on a per minute basis up to a certain number of gigabytes and then pay a different rate beyond that threshold.
We also have to pay a monthly access fee per activated sim. Comments (5)
|
Calendar
QuicksearchArchivesCategoriesBlog AdministrationExternal PHP Application |