John Linton
......when I read this in the early hours of this morning:
http://apcmag.com/virgin_broadband_pulled_from_retail_sale.htm
We are less than two months in to basing a significant future strategy on HSPA, and currently that in turn is based on Layer 2 HSPA services from Optus, and reading about Optus Retail's problems leading to the withdrawal of their "Fusion" offerings and now the withdrawal by their wholly owned Virgin offshoot of their major HSPA offering isn't something I needed in the early hours of today. It makes the whole Optus HSPA service look bad which Exetel's testing and over 400 Exetel 'live users' don't find to be the case. - at least at this early stage.
I had my 'dummy spit' a few days ago about Optus losing $A44 million on their Apple iPhone/HSPA promotion (while they adamantly insisted they couldn't afford to sell at a few tenths of a cent lower to Exetel in our start up phase) and this kind of just adds insult to injury.
I, personally, don't care how any company chooses to piss away its profits letting some dweebs in "marketing" indulge their uninformed fantasies and paranoid delusions but when they completely screw it up to the point where they have to, very publicly, get slammed in the media leading to what appear to be totally damning admissions that their base network just can't deliver what is being promised it IS something that VERY MUCH concerns me.
So let me add my two cents worth to what both Optus Retail and Virgin Retail has done based on what I know to be true about the actual costs of delivering HSPA in the UK where the take up is 100+ times higher than it is on the Optus Australian network and, in terms of kilometers of backhaul cable and microwave, probably at least ten times more.
The HSPA services in the large UK cities are pretty near full speed based on my personal experience and the technical reports in the UK journals. The HSPA network I used claimed to have close to a million subscribers and even in the middle of Scotland the signal strength was adequate to keep my connection usable on mountains and moorlands. So coverage was fine but more importantly I only noticed congestion issues for short periods of time and only in remoter areas of England and Scotland.
For Virgin/Optus Retail users to claim they experience congestion/unusability in Australia's capital cities is quite puzzling. It's particularly puzzling because we actually have customers who have a Virgin/Optus HSPA service who also now have an 'Exetel/Optus' HSPA service - and they report a very puzzling 'anomaly'. They say, and I've actually observed this on two occasions, that they can sit the two services side by side on the same type of hand set and get two markedly different download speeds at any time of day. When the "Virgin/Optus" service is virtually unusable the "Exetel/Optus" service works at almost full speed.
Personally I find that incapable of explanation in terms of poor Optus network coverage because both devices should have performed identically.
So there would need to be another explanation.
The most obvious explanation, and the one that would occur to anyone who has any slight experience of running a network, would be that the "Virgin" network is constraining the speed achieved 'artificially' either deliberately or by incompetence in under provisioning the bandwidth on the 'hand offs'. Under provisioning hand off bandwidth would be very unlikely in the face of a decision to be totally humiliated by withdrawing the service. There may be other explanations but I don't have the engineering knowledge to think of one.
While I was in the UK, and subsequently on returning to Australia, I have been given pricing based on very low volume forecasts but from a company with huge volume discounts of their own they are prepared to pass on to us. Their pricing, to us, is one fifth of a penny per mbyte which at today's exchange rate is about half an Australian cent. As they aren't the carrier you have to assume that the carrier's cost is less than that - at least I would make that assumption.
Exetel pays more than that to Optus but, again we assume, that their internal charges to their retail operations (including Virgin) are probably around the UK volume buyer cost of half a cent per megabyte - I really don't know and could be quite wrong - in either direction.
It's unlikely that Optus Retail are very efficient (and the waste of money on the iPhone promotion seems to support that assumption). Presumably Virgin is more efficient than the Optus brand retail operation but follows a similar high advertising expenditure 'go to market' practice. Both give away hardware/sims/delivery charges etc and both have heavy advertising and end user support costs - though not very effective support from what appears in the media and a quick check of calling their support numbers.
For Virgin to offer 5 gigabytes of downloads for $A40.00 ($A8.00 per gb) they would have to either plan to deliver less than half that volume or buy at a lot better, not just a bit better, than half a cent a megabyte. My view, based on no actual knowledge, is that they don't get better pricing than half a cent a megabyte and they do provision (via strangulaton) their network capacity to less than half what they appear to be offering to the end users. Perhaps they just got the provisioning wrong on the Virgin tunnels?
That would explain why I can't seem to ever have any trouble with my Optus HSPA service yet in the same locations (within a meter) a Virgin/Optus service is virtually unusable.
Maybe Exetel is just fortunate that we are somehow getting preferential treatment - and that may well be the case - not because we are somehow 'special' or 'favoured' but because we have a Layer 2 connection which means, at least I've been told, that we get discrete tunnels across the Optus network.
I will be interested to see what explanation Optus now gives, in the event that they do, as to why there are such issues with the Optus Retail and Virgin offerings that they had to be withdrawn. I'm sure it will turn out to be something less devastating than anything bad I can imagine.
....and I thought I had problems....a "federal investigation" would waste an awful lot of time.
(I wonder how those Optus marketing genii who pissed away the 44 mill will be treated now the plans they wasted all that money promoting have been withdrawn?)