John Linton ....going pretty much as predicted but now reaching the ultra silly stage as the Empire doesn't only strike back but the Death Star wasn't destroyed as originally reported and a lot more ISPs have gone the way of Alderaan.....and the rebel leaders are quarreling among themselves.
I saw that Internode have released a "terabyte" plan and also had yet another go at Telstra Retail for "selling retail below wholesale cost". What 'magic kingdom' have they been residing in not to have noticed that Telstra Retail have been doing that for the best part of two years in their latest iteration? Perhaps it's only now that they have begun to lose customers on a big enough scale to notice?
I get asked by current customers on a more frequent basis "when will Exetel release "it's" terabyte plans. My answer is always - "when we see a demand for them and can provide them at a cost people are prepared to pay and that we could afford to offer which at the moment would be never". Perhaps there are one or two people who could actually find a terabyte of data to download in a month; month after month....I would personally doubt it - even accepting that the vast majority of such data would be illegal copyright theft. Then again could a provider, of any size, provide a terabyte of downloaded data for $100.00? Of course not. So we have the, to date, absolute silliness - a broadband 'plan' that no-one can use and that no provider can provide without losing mega dollars per customer. (Internode very sensibly pitched its price at 50% above the other offerors to ensure no-one took them up on the offer).
The ultimate stupidity in this particular silliness was a company called 'Spin' (whom I had never heard of) 'announcing' a terabyte plan which five minutes of 'research reveals is based on Optus ADSL2 wholesale pricing and, should they ever be unfortunate enough to sign up a customer on it would lose them a great deal of money at even one tenth of that download allowance. So what is it all about? I don't have the slightest idea beyond achieving some ephemeral 'awareness' among the ultra-stupid/teen age ADSL users (and the teenage media who write about it) who could never afford even $100.00 a month unless their parents pay for it.
Beyond the stupidity it is a sign of total desperation by more than one provider as Telstra continues to spend whatever money it takes to 'win back' market share in the residential ADSL product categories. We have an increasing number of days where the churn loss of customers is 100% to Bigpond and we offer very competitive ADSL2 plans to those Telstra offer on the Telstra customer to us network. What we don't have is the $200.00 plus of cash incentives to 'lure' the innumerate nor the multi-billions of dollars to pay door knockers and telephone pests to call up all Bigpond's customers with 'amazing offers'. I am pretty sure even Optus (who continue to single handedly decimate the forests of the planet to provide the shiny paper to fill my letter box and pollute my newspapers with inserts proclaiming the wonders of broadband) cannot 'out spend' Telstra in the current onslaught let alone the less sizeable providers who are smaller and far less 'wealthy' than Optus.
Even someone with only a passing acquaintance with the Australian broadband marketplaces would realise that a 'terabyte plan' is going to generate very, very few users and that the cost of actually delivering such a nonsense is going to be money losing. It would also have absolutely NO effect on stemming the customer churn away via the current Telstra Retail promotions - so why have the companies that have done it ....well...done it? The two words that come to mind are stupidity and desperation....at least they are the words that seem to describe the scenario.
For those of you who have bothered to read my jottings for a while you may remember that I wrote some 18 months ago that 2009 would be very hard for broadband providers but nothing like as hard as 2010 would be? I think that forecast was very accurate and 2010 is turning out to be very hard indeed.
As in all 'price wars' the only thing that can be done is to raise prices (nothing can be achieved by lowering them) and looking after the percentage of customers who value the services you provide while reducing your expenses via the customers who do not value your services transferring to other providers with different views and thus lowering the bills you get from your wholesale suppliers.
One more thing to worry about.
PS: Amazing what can be done when people care enough:
http://www.telegraph.co.uk/earth/earthnews/7989196/Record-numbers-of-salmon-and-trout-in-British-rivers.html
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