John Linton .....an opinion that has been expressed several times over the past few days.....where the low usage market is described as "$30.00 per month.
Perhaps that's true. I am wondering which ISPs have buying and operating costs that allow ANY sort of ADSL service to be sold at $30.00 per month? Exetel has obviously fallen so far below reasonable 'buying power' that we obviously can no longer compete in these marketplaces - if "$30.00 per month is indeed the reasonable price for an ADSL service in 2011. The prices we pay for port costs alone are more than $30.00 for a 1500/256 ADSL1 service without telephone line rental (available widely) and are over $38.00 for an ADSL2 service including telephone line rental (available from around 400 exchanges).The cost of running Exetel (administration, support, billing, Pop costs) is around $1.50 per customer and back haul and IP is around $0.80 per gb.
Assuming the low end user uses less than 3 gb per month (which they do) the lowest cost (without profit) for a service is:
ADSL1 1500: $30.00 + $1.50 + $2.40 = $33.90
ADSL2: $38.50 + 1.50 +2.40 = $42.40
How does Exetel offer a "$30.00 per month service when the COSTS of such a 3 gb service are higher than such an end user price? The answer is it can't be done by Exetel and could only be done by a company with far lower component buying costs. If you were to look at the providers of ADSL in Australia which suppliers would you find that offer such a service? Personally I can't find one but then I am 'battle fatigued' from looking at pricing of ADSL services over the last two plus years. Please don't cite the TPG con of $29.95 for unlimited ADSL which any ethical company would advertise as being $59.95. Exetel can provide an AAPT service at below $30.00 (for a ADSL service only with the customer paying for the telephone line component to the provider of their choice) but the coverage is restricted to major exchanges in major cities and, because of the carrier subsidies this offer can only be provided to new customers.
So, a $30.00 ADSL service is out of the question from Exetel and, as far as I can see, is out of the question from any other supplier who intends to fully provision their network to deliver full speeds at all times of the day and week......something some suppliers clearly have no intention of doing and rely on customers who either don't know or don't care that they are expecting a service that does not perform to the apparent speed and reliability description.But, even if that is not the case, Exetel's costs are greater than $30.00 a month so it is an impossible price for us to offer and as we need to make a profit to stay in business we can't begin to contemplate such a price point. Should there be providers that can offer such pricing, and make a profit, then it just confirms that Exetel should put its efforts in to products and services that can be competitive and sustainable in the longer term.
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