John Linton ....on Telstra Retail's latest attempt to increase their market share at the high user end.
In stark contrast to what I alluded to yesterday (average downloads have fallen over the past two months) Telstra's latest 'win back' foray is based on different assumptions:
http://www.itnews.com.au/News/259538,telstra-reaches-for-500-gb-quotas.aspx
http://delimiter.com.au/2011/06/07/telstra-doubles-bundled-data-quotas/
500 gb per month is a huge amount of downloads and, if someone were to actually use it, loses money even for Telstra. The "terabyte plans" were always a marketing gimmick and are impossible to provide but, like the new Telstra initiative, are based on the 'average' user of such plans using a fraction of that amount. Even so it isn't hard to work what Telstra Retail's target is for these new huge download allowance plans - but it simply won't work. Now there's a brave pronouncement for someone to make who, of course, has no knowledge whatsoever about the 'research' Telstra Retail has done before launching these huge allowances.
With 80% (at least) of the ADSL market using less than 20 gb of downloads per month and 99% of the market using less than 80 gb, just who is Telstra Retail aiming at? The obvious answer is TPG who is, apparently from what is published on third party web sites, suffering from an increasingly saturated network and is, after Telstra, the only residential ADSL provider gaining new ADSL customers at any 'publishable' rate. But TPG's customers (though I obviously know nothing of their actual statistics) don't buy from TPG because of the 'unlimited downloads'. They buy because TPG has the lowest price for 'unlimited downloads' and the fact that they may have a saturated network, in at least some locations, is unimportant to a big chunk of customers who buy on that basis - illegal down loaders to whom speed is far less important than volume.
At Telstra's prices, TPG users will almost certainly be uninterested - price being their first decision point with as much volume as possible for that price being a distant second criterion. Telstra Retail, almost certainly, will try to present a better 'price proposition' by their usual bundling but will that even begin to address the user of TPG 'unlimited services'? A TPG buyer will almost certainly buy their mobile phone service on the same basis as their ADSL service and will also buy their telephone line service on the same basis. They almost certainly won't have Foxtel because they illegally download whatever entertainment content they wish to view. So a TPG 'unlimited' ADSL user is almost certainly not going to respond to a Telstra Retail win back campaign unless it comes with a massive up front 'cash' discount - which is more than possible.
Perhaps Telstra Retail are aiming at the more highly priced iinet, Internode and iPrimus heavy down loader bases? The price differential would not be as great compared to TPG and up front cash bonuses could more easily bridge the monthly price 'gaps'. Only Telstra Retail's marketing experts would know what they are aiming at and that information is not going to be available to casual commentators. I guess it will become clear over the coming weeks if whatever the strategy is actually works but somehow I can't see any significant number of 'terabyte' plan users being attracted to a swap to Telstra Retail. Then again I haven't any real ideas as to what any of the current marketplaces are currently being attracted to.
So will TPG users, at least those who suffer from the suggested network saturation, see an expensive Telstra Retail solution as the answer to their prayers? I doubt it. Is there any other demographic that such a new Telstra initiative addresses? While someone within Telstra Retail clearly thinks so it is very hard to work out what that might be. It seems to be a 'desperate way of spending the last of the gigantic amount of marketing dollars allocated to driving out ADSL competitors - but unlike the previous campaigns - I can't see this one working out - at all....unless maybe they will offer a $500.00 'credit' for anyone who takes up the offer?
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