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671 posts

Ultimate Geek


  # 240641 30-Jul-2009 16:42
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ockel:
itxtme: Another point; how much in terms of variable costs does it effect TC's profit by putting customers on the faster speeds?? If the equipment is there, why put a huge barrier ie. massive expense - to customers wanting the increased speeds!?

Intresting food for thought (price per gb)

HighSpeed 10G $5.50 
LightSpeed 20G $4.00 
LightSpeed 40G $2.75 
LightSpeed 80G $1.87 
WarpSpeed 120G $1.92 





Actually it looks like you pay $60/mth access and $1.14/Gb for Lightspeed. 
Highspeed looks like you pay $15/mth less for the slower speed.
Warpspeed looks like you pay $30/mth for the faster speed. 

It looks sensible to me, if you want higher speeds you should be willing to pay a premium for the product relative to slower products.


Not when the premium is so prohibitively high that less than 20 customers have signed up for it.

425 posts

Ultimate Geek


  # 240645 30-Jul-2009 16:55
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ockel:
itxtme: Another point; how much in terms of variable costs does it effect TC's profit by putting customers on the faster speeds?? If the equipment is there, why put a huge barrier ie. massive expense - to customers wanting the increased speeds!?

Intresting food for thought (price per gb)

HighSpeed 10G $5.50 
LightSpeed 20G $4.00 
LightSpeed 40G $2.75 
LightSpeed 80G $1.87 
WarpSpeed 120G $1.92 





Actually it looks like you pay $60/mth access and $1.14/Gb for Lightspeed. 
Highspeed looks like you pay $15/mth less for the slower speed.
Warpspeed looks like you pay $30/mth for the faster speed. 

It looks sensible to me, if you want higher speeds you should be willing to pay a premium for the product relative to slower products.


The reality is that there is no competition for the WarpSpeed plan, so there's little motivation for TCL to make this plan more accessible.

None of the ISPs want to start a price war.



 
 
 
 


1700 posts

Uber Geek


  # 240651 30-Jul-2009 17:03
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Is the low signup rate a function of cost or poor marketing?
How many businesses havent signed up for VDSL (BizPlan) because they simply arent aware. There are earlier posts in this thread speculating on the event being for VDSL - despite the fact it was launched months ago.
Would I pay $60/mth plus data for 10Mbps, absolutely. Would I pay $90/mth plus data for 25Mbps? Really depends on whether I need it.

671 posts

Ultimate Geek


# 240660 30-Jul-2009 17:10
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freitasm: Video I:


Ugh, he's so out of touch it's not funny. He says "100 megaBYTES per second" at the end, and even admits that he doesn't really understand it.

I also like how 99% of the video was just about their stupid F1 analogy.

Oh and incase anyone missed it, in the NZHerald article, it says that 100Mbps will be available "by next year". Of course translating that from the TelstraClearean Calendar(TM) to the Gregorian calendar makes that some time in 2012.

Let's figure out how much it'll cost. The TelstraClear system of pricing dictates that older services never become cheaper, and each new faster service is more expensive than the last. The 25Mbps plan is $230, and the cheapest 10Mbps plan is $80. That's $10 per Mb extra. Extrapolating this for 100Mbps gives $980. What a bargain! We can also guess at the number of customers this will entice. According to Wikipedia, TelstraClear has 70,000 cable and mobile customers. I'm going to take a stab in the dark and say there are 15,000 customers on a 10Mbps plan. We now know that there are less than 20 customers on 25Mbps, so we can assume that will rise to a whopping less-than-40 now that Wellington has it. Extrapolating (badly) to 100Mbps, TelstraClear can expect a truly enormous userbase of 0.0667 customers Wink

1700 posts

Uber Geek


  # 240832 31-Jul-2009 08:44
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Screeb:
freitasm: Video I:


Ugh, he's so out of touch it's not funny. He says "100 megaBYTES per second" at the end, and even admits that he doesn't really understand it.

I also like how 99% of the video was just about their stupid F1 analogy.

Oh and incase anyone missed it, in the NZHerald article, it says that 100Mbps will be available "by next year". Of course translating that from the TelstraClearean Calendar(TM) to the Gregorian calendar makes that some time in 2012.

Let's figure out how much it'll cost. The TelstraClear system of pricing dictates that older services never become cheaper, and each new faster service is more expensive than the last. The 25Mbps plan is $230, and the cheapest 10Mbps plan is $80. That's $10 per Mb extra. Extrapolating this for 100Mbps gives $980. What a bargain! We can also guess at the number of customers this will entice. According to Wikipedia, TelstraClear has 70,000 cable and mobile customers. I'm going to take a stab in the dark and say there are 15,000 customers on a 10Mbps plan. We now know that there are less than 20 customers on 25Mbps, so we can assume that will rise to a whopping less-than-40 now that Wellington has it. Extrapolating (badly) to 100Mbps, TelstraClear can expect a truly enormous userbase of 0.0667 customers Wink


I think thats a relatively naive analysis.  The speed premium would appear to follow a natural log curve.  On this basis to increase from 25Mbps to 100Mbps suggests an additional $60/mth access charge.  I'd postulate that a 100Mpbs plan could cost $150/mth plus data.  So perhaps a 100Mbps plan with 250Gb of data could cost around $440/mth.   When compared to the BizPlan supreme (VDSL2 at 30 DL/7 UL) of $400/mth access plus data it seems relatively compelling. 

Or compare it the FTTH (WxC Fusion over Fibre) at $99/mth access plus $1.02/Gb.  Its throttled to 30DL/6UL in terms of speed.  Funny how the residential prices for TLSClear and WxC are similar.  Different technologies but the underlying price is similar.  I'm sure you'll scream conspiracy and monopoly but it may actually be related to cost.  If there were any elasticity to demand then prices would fall to drive demand and increase total profit.  But only if there were decent margins to start with....

2 posts

Wannabe Geek

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  # 240853 31-Jul-2009 09:30
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For a little mor on Allan Freeth's thoughts around the DOCSIS3 upgrade and pricing strategy, I've posted some additional comments he made that I couldn't fit in my Herald article. My be of interest:






Simon Hendery

68 posts

Master Geek

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  # 240861 31-Jul-2009 09:59
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Thanks for sharing that Simon.

I'm looking forward to seeing the VDSL2 consumer offerings and pricing, realistically ADSL2+ suits my home needs but it would still be great to have more options, and no doubt different usage tiers/packs will come with that I think.

 
 
 
 


85 posts

Master Geek

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  # 240863 31-Jul-2009 10:04
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Great interview, cheers Simon!

425 posts

Ultimate Geek


  # 240865 31-Jul-2009 10:09
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simonhen: For a little mor on Allan Freeth's thoughts around the DOCSIS3 upgrade and pricing strategy, I've posted some additional comments he made that I couldn't fit in my Herald article. My be of interest:







25Mbps and beyond: Allan Freeth explains TelstraClear’s ultra-fast broadband strategy




Interesting - thanks for that.  So basically they're stretching the system to get 25Mbps on DOCSIS2.0 currently and so don't really want a ton of users on that plan.  DOCSIS3.0 will allow them to have a lot more users on 25Mbps+ speeds so they'll reduce prices to attract more users then.

Makes sense to me.




671 posts

Ultimate Geek


  # 241042 31-Jul-2009 16:57
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ockel:
I think thats a relatively naive analysis.  The speed premium would appear to follow a natural log curve.  On this basis to increase from 25Mbps to 100Mbps suggests an additional $60/mth access charge.  I'd postulate that a 100Mpbs plan could cost $150/mth plus data.  So perhaps a 100Mbps plan with 250Gb of data could cost around $440/mth.   When compared to the BizPlan supreme (VDSL2 at 30 DL/7 UL) of $400/mth access plus data it seems relatively compelling.


My "analysis" was sarcastic, hence the wink at the end.


When compared to the BizPlan supreme (VDSL2 at 30 DL/7 UL) of $400/mth access plus data it seems relatively compelling.


Compelling perhaps for businesses. But utterly useless for residential customers due to the price.


Or compare it the FTTH (WxC Fusion over Fibre) at $99/mth access plus $1.02/Gb.  Its throttled to 30DL/6UL in terms of speed.  Funny how the residential prices for TLSClear and WxC are similar.  Different technologies but the underlying price is similar.  I'm sure you'll scream conspiracy and monopoly but it may actually be related to cost.  If there were any elasticity to demand then prices would fall to drive demand and increase total profit.  But only if there were decent margins to start with....


Lack of competition. No "conspiracy" needed.

671 posts

Ultimate Geek


# 241043 31-Jul-2009 17:10
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simonhen: For a little mor on Allan Freeth's thoughts around the DOCSIS3 upgrade and pricing strategy, I've posted some additional comments he made that I couldn't fit in my Herald article. My be of interest:


25Mbps and beyond: Allan Freeth explains TelstraClear’s ultra-fast broadband strategy



Sigh, more BS from Freeth underplaying the ridiculous price. Even referencing the Castalia report saying that people aren't prepared to pay for high end services. Yeah, no crap people aren't willing to pay HUNDREDS of dollars for broadband - that's why you shouldn't make it so bloody expensive! People have no trouble paying for high end services in other countries because there they don't cost the earth. We end up paying the same prices here, only we get crap broadband compared to the high end services overseas.

Thanks for the article though Simon.

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