$199 vs $1680

Forums › 2degrees (including Slingshot, Orcon, Flip, Stuff Fibre, MyRepublic, 2talk and Vocus) › $199 vs $1680

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mercutio

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#595750 15-Mar-2012 17:45

moxpearl:
sbiddle: Why are oranges and apples not the same price? They are both fruit.

That does not really help, neither do the rest of the comments

I am asking how can they justify the extra $1481 dollars..

Not just "Because"

The thing is if you're going to experiment with higher caps, it's much easier to do it on a more limited customer base. If they allowed 1tb on adsl they'd get a whole lot of extremely high usage customers. But with UFB they're already cutting down who is eligible. I'm expecting a lot of users will only do 200gb, or thereabouts. And if it doesn't work out well they can always change the pricing down the track.

Also bandwidth prices are coming down. And it's many years away before UFB will really have significant availability.

Anyway, if push comes to shove, and you really want to do 1TB/month prepaid on ADSL, I'm sure you'll find Orcon or someone else could do you a deal for $200/month or thereabouts. There'd probably be a few caveats though. Like you'd have to be on EUBA, if Telecom start enforcing dimensioning then could be withdrawn etc.

NonprayingMantis

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#595759 15-Mar-2012 18:14

moxpearl:
sbiddle: Why are oranges and apples not the same price? They are both fruit.

That does not really help, neither do the rest of the comments

I am asking how can they justify the extra $1481 dollars..

Not just "Because"

see my previous post - the plan itself is irrelevant to their costs, it is the usage that matters. I would say that the 1TB plan wil probably have an average usage the same, or lower, than the 300GB plan

it’s all about the price relativities between the other plans. By having a jump in datacap between 100GB and 1TB, Orcon know that people who want anything between 150GB and 1TB will take the 1TB plan. The average usage on that plan even once they get people on it, will probably be somewhere in the vicinity of around 200GB.

Compare that to the 300GB plan they offer on ADSL. The next biggest is 200GB, meaning that people will need to be using quite a bit more than 200GB before it becomes worthwhile.
So I wouldn’t be surprised if the utilisation on the 300GB plan is LOWER than the utilisation will be on the 1TB plan , when people actually start connecting to it. And utilisation is what drives cost, not the allowance itself.

So if you like the idea of the 1TB plan for $200, you need to accept that Orcon can’t afford to offer plans in between that and 100GB

surfisup1000

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#595762 15-Mar-2012 18:29

sbiddle: Why are oranges and apples not the same price? They are both fruit.

Of course, but , why does the the fuel used to deliver apples cost $20.00 / litre, but the same fuel used to

deliver oranges costs $200.00 /litre.

sbiddle

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#595786 15-Mar-2012 19:21

surfisup1000:
sbiddle: Why are oranges and apples not the same price? They are both fruit.

Of course, but , why does the the fuel used to deliver apples cost $20.00 / litre, but the same fuel used to

deliver oranges costs $200.00 /litre.

You're overlooking many aspects of that form the basis of pricing. The cost of national or international bandwidth once your connection terminates at your ISP's network is only one part of the equation.

With BUBA per user handover dimensioning is enforced, and with EUBA no dimensioning is currently in place but Chorus are still promisining to deliver this soon. Dimensioning forms part of the Commerce Commission's regulated product offering.

Anybody who understands the DSL wholesale products and services along with dimensioning understands the issues that will result if you suddenly had a large customer base of 200GB + customers with dimensioning. Quite simply your network performance would fall to pieces.

With UFB's higher CIR dimensioning to the ISP higher cap plans are suddenly more realistic.

And for those who complain about current dimensioning, and the forthcoming EUBA dimensioning which has got the potential to impact current users remember the Commerce Commission regulates DSL in NZ and makes the rules. If you have issues with the regulated wholesale products Chorus offer the Commerce Commission are the people to complain to.

networkn

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#595901 15-Mar-2012 23:27

Sbiddle: I don't really understand in depth what you are saying, but essentially there have to be 1 or 2 key parts to why DSL Traffic is exponentially more expensive than UFB Pricing. Do you know and can you explain what they are?

Talkiet

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#595913 16-Mar-2012 00:07

networkn: Sbiddle: I don't really understand in depth what you are saying, but essentially there have to be 1 or 2 key parts to why DSL Traffic is exponentially more expensive than UFB Pricing. Do you know and can you explain what they are?

It's got very little to do with technology and more to do with retail pricing decisions. There are unlimited ADSL plans available in NZ today so I don't see the big deal.

Presumably your question is why Orcon have chosen different pricing strategies for ADSL and UFB? Well, you could ask them but I doubt any retailer is going to explain in depth why they have made a given commercial decision..

If it helps, you can be sure the the cost contributors for ADSL and UFB (if available) for a 1TB plan won't be ~$1400 different... However as a retail ISP, Orcon can charge whatever they like.

So No - there won't be 1 or 2 key parts to why an ISP has decided on different pricing approaches for Broadband delivered over 2 different access methods.

Cheers - N

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Ragnor

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#595919 16-Mar-2012 00:39

networkn: Sbiddle: I don't really understand in depth what you are saying, but essentially there have to be 1 or 2 key parts to why DSL Traffic is exponentially more expensive than UFB Pricing. Do you know and can you explain what they are?

Basically...

Your line > cabinet/exchange > backhaul/tail extension > ISP handover connection > ISP network > ISP transit international/national

Generally the first 4 parts have higher wholesale costs for DSL than UFB, especially risky is #4 where possible dimensioning could be applied.

In the "old days" (before EUBA, Telecom NGN, ethernet backhaul/handover) the handover/backhaul was ATM

The ISP handover connection was dimensioned, ie: hard limited to a speed determined by a formula: number of customers x 45kbits + % for projected customer growth for next x months.

So for a theoretical ISP with 1000 users with 20% projected growth would have a handover connection speed limited to ~50Mbit.

Basically this was appalling artificial scarcity, effectively a ~200:1 contention ratio. This was before traffic even got to the ISP network, at the time DSL networks overseas typically had 50:1 or 20:1 contention.

This obviously put serious limits on the data caps ISP's could offer without turning performance to custard. ISP's had massive problems with this until EUBA as higher caps = more constant usage = more congestion.. hence the low caps for high $$.

At the time most Telecom Retail customers were still on earlier FPID or UBS services and not subject to quite the same limits™.

The ComCom was particularly ineffective on dimensioning issues.

Later with the operational separation requirements Telecom Retail was required to use the same Telecom Wholesale services as other ISP's and things "got real" and dimensioning of EUBA/HSNS handover slipped and never happened LOL.

Currently under EUBA there is no dimensioning in place, it was planned to be done but has been delayed 4-5 times. It's probably never going to happen given Telecom has to use the same services as other ISP's and with Chorus being a completely different company now and UFB work going full steam. I doubt there is an strong incentive to bring dimensioning for EUBA/HSNS handover

However this dimensioning could be brought in at any time Chorus wanted to bring it in.. only risky ISP's offer large or unmetered data. If EUBA/HSNA handover dimensioning came in tomorrow Slingshot would be screwed and lots of ISP's with large caps would be too...

UFB does not have the same concept of dimensioning instead the various bitstream services have varying CIR's for different prices. CIR's are a guaranteed minimum not a hard limit like dimensioning.

Anyway that's my condensed version of some complicated issues/politics about why DSL has low expensive data caps, happy to be corrected by any ISP peeps that want to comment.

moxpearl

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#608676 13-Apr-2012 11:10

kyhwana2:
networkn:

I am wondering what will happen with DSL Pricing in the short to medium term.

Nothing, the price of wholesale DSL is regulated. (Except VDSL which isn't, but chorus/wholesale are charging $50 more for it, since it's a "premium" service.

eh ... ?

So this thread is full of people saying why fibre is way cheaper than ADSL in terms of traffic..

But the new Telecom ADSL plans are cheaper than orcons fibre plans

NonprayingMantis

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#608686 13-Apr-2012 11:20

moxpearl:
kyhwana2:
networkn:

I am wondering what will happen with DSL Pricing in the short to medium term.

Nothing, the price of wholesale DSL is regulated. (Except VDSL which isn't, but chorus/wholesale are charging $50 more for it, since it's a "premium" service.

eh ... ?

So this thread is full of people saying why fibre is way cheaper than ADSL in terms of traffic..

But the new Telecom ADSL plans are cheaper than orcons fibre plans

Traffic is not the only determinant of total cost. In fact it is a relatively small component of total cost for the average user (10-20GB)

sbiddle

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#608703 13-Apr-2012 11:37

Chorus also aren't charging $50 more for VDSL2 than the regulated ADSL2+ cost.

kyhwana2

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#608890 13-Apr-2012 18:06

sbiddle: Chorus also aren't charging $50 more for VDSL2 than the regulated ADSL2+ cost.

So what are they charging ISPs for it, then?
(I've not seen the actual wholesale figure anywhere)

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lucky015

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#608912 13-Apr-2012 18:55

kyhwana2:
sbiddle: Chorus also aren't charging $50 more for VDSL2 than the regulated ADSL2+ cost.

So what are they charging ISPs for it, then?
(I've not seen the actual wholesale figure anywhere)

I think the actual premium is about $20 or similar on wholesale.

sbiddle

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#608928 13-Apr-2012 19:11

It's a commercial rate rather than regulated so I'm not willing to post it here, but it's safe to say it's significantly lower than $50

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