John Linton
I was reviewing the proposed "Naked ADSL2" costings last night in light of a 'letter' we'd received from Telstra at our home address. As with everything from any marketing department it was interesting in what a strict legally invigilated marketing department like Telstra's is allowed to say compared to the restrictions that small companies like Exetel are allowed to say. That aside I was interested in the accommodations that Telstra is now making to the less intellectually gifted of their residential customers (presumably like Annette and me).
I thought the most amusing statement was the opening "major benefit" which read:
"Get speeds up to 8Mbps with BigPond Broadband, which won 'Internet Technology Of The Year in 2007'.
The qualifier, in small print on the back page didn't actually say who awarded this offer "Technology of the year" - it started with "based on Telstra tests.... which, while implying that Telstra made the award to itself, presumably really referred to the fact that you can't actually get 8mbps.....as I said.....only Telstra could get this sort of thing legally approved.
Anyway - I digress - what interested me was the fact that both iiNet and Telstra BigPond have obviously decided that $59.95 is the 'sweet spot' for residential internet users. This is good news in the event it proves to be true because it is the figure that Exetel and several other ISPs believe is the most likely acceptable cost for a residential user of telephone/internet services.
The key differentiaor in the Telstra offer is their delivery of 10 cent local calls via PSTN for the first time plus their provision of 12 gb of downloads as a base offer - finally acknowledging that 200 mb (so adamantly stuck to for so many years) isn't of much use 'even' to the very lowest of internet residential users.
What's more interesting is that Telstra's offer is vastly superior to iiNet's newly released "Naked ADSL2" offer at $59.95 and has caused me to, yet again, re-think the pricing and construction of a new Exetel offer.
Essentially Telstra provides up to 8Mbps/384kbps internet with 12 gb of peak downloads/uploads for $59.95 over a standard telephone line/number AND with 10 cent local calls and a free modem and install on a 24 month contract.
Compared to:
iiNet who provides ADSL2 speeds with 3gb of peak downloads/uploads at $59.95 on a 24 month contract over a non usable telephone line with 'unlimited' local and national calls if you care to buy a VoIP enabled device.
Telstra also give a $110.00 credit. Telstra's offer is also available to virtually every Australian user while the iiNet offer is available on their own DSLAMs.
I think the convenience of the churn option with the Telstra offer (its ADSL1) is probably also an advantage to the users/new users to whom this offer appears to be pitched.
Both offers have the major turn off of a 24 month contract and iiNet's offer of 3gb peak (which is more like 2 gb of downloads plus 1 gb of uploads) is not terribly usable to the average ADSL user who probably uses an average of more than 2 gb of downloads these days.
Based on past history TPG will offer the same as iiNet at lower prices but with the Telstra 12 gb of downloads and Internode will almost certainly offer something slightly better than the iiNet offer when they get around to doing it.
I think the Telstra offer kills all other ADSL1 offers with their retail price to a customer around $35.00 a month cheaper than the equivalent service to a wholesale customer. What Telstra Retail are now offering re-defines ADSL1 as a minimum of an 8mbps/384 service and has reduced the price of local calls to what the lowest cost VoIP providers offer.
In terms of the iiNet "Naked ADSL2" offer - that's a lot easier to deal with. I think the Telstra offer kills it stone dead and therefore any other ISP will be able to meet it/beat it with some sort of ADSL2 offer.
However life seems to just get tougher in competing with Telstra.