Bizarre Policy on plan change

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toejam316

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Topic # 152183 18-Sep-2014 16:21

I've discovered that one of Orcon's policies is that on plan change, they wish to re-engage a 12 month contract.
I'm not sure who would agree to this, because it's absolutely mad. I'm currently on the $129 100/50 plan (thankfully not the $139 one), and the current plan is $125 for 100/50.
So, I call up to get changed and save $4, no big deal, but $4 is $4.
I mention that it's odd that this wasn't an automated change, as I would expect that sort of thing as a customer, and I was informed that it doesn't happen because you need to agree to a new 12 month contract.

So now I'm wondering, is there much of a reason now to stay with Orcon if someone else comes out with a better offer? I'm imagining not, and greedily awaiting Big Pipe's UFB plans being made available to UFF customers.

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Reply # 1131571 18-Sep-2014 16:28

It's not that bizzare, Orcon are not the only ISP to do this.

toejam316

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Reply # 1131573 18-Sep-2014 16:30

I've not been aware of any other ISPs that do this, but I'd argue it's a bizarre policy for any of them. The thing I find silly is the idea of a contract is to prevent a customer churn, whereas in this instance, this is making me MORE likely to churn, because as a new customer to an ISP I stand to gain more than I do as an existing customer with my current ISP.

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NonprayingMantis

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Reply # 1131580 18-Sep-2014 16:43

If the plan change required Orcon to incur significant cost - e.g. the move from ADSL to VDSL requires splitter install and new modem - then I could understand a contract being required to ensure they recover those costs. in return for signing for 12 months, they are not charging you the costs of connection.

But the move from one UFB plan to another costs them nothing (beyond a few minutes time in the provisioning team) so IMHO there should not be any requirement to sign a new contract. i.e. you aren't getting anything in return for your new contract.

If my ISP tried to do that I'd just leave and find a better one.

toejam316

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Reply # 1131589 18-Sep-2014 16:51

NonprayingMantis: If the plan change required Orcon to incur significant cost - e.g. the move from ADSL to VDSL requires splitter install and new modem - then I could understand a contract being required to ensure they recover those costs. in return for signing for 12 months, they are not charging you the costs of connection.

But the move from one UFB plan to another costs them nothing (beyond a few minutes time in the provisioning team) so IMHO there should not be any requirement to sign a new contract. i.e. you aren't getting anything in return for your new contract.

If my ISP tried to do that I'd just leave and find a better one.

That's the frustrating thing - as far as I'm aware it's just changing the billing to dock the $4 in pricing - as far as I'm aware the dimensioning on the newer 100/50 is still the original CFH spec, as UFF don't offer the above spec 110/55 dimensioning. I'm not sure how a $4 price drop (a whopping $48 saving over 12 months) justifies a 12 month contract with a maximum ETF of $250.

muppet

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Reply # 1131591 18-Sep-2014 16:55

toejam316:
That's the frustrating thing - as far as I'm aware it's just changing the billing to dock the $4 in pricing - as far as I'm aware the dimensioning on the newer 100/50 is still the original CFH spec, as UFF don't offer the above spec 110/55 dimensioning. I'm not sure how a $4 price drop (a whopping $48 saving over 12 months) justifies a 12 month contract with a maximum ETF of $250.

They basically reduce the price for you, but to offset that loss of money they ask for a 12 month commitment.

I don't see how it's any different from a bank who will give me 5% PA return on investment for a 12 month investment, vs say a 7% PA return on investment, but I've got to leave the money with them for 2-3 years.

It's not bizzare. It's business.

When I was a TelstraClear customer they did the same to me. I rang up and got a cheaper price, but had to commit to another 12 months.

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FireEngine

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Reply # 1131592 18-Sep-2014 16:56

toejam316: I've discovered that one of Orcon's policies is that on plan change, they wish to re-engage a 12 month contract.

Just to clarify, if you are currently in a contract, you can Plan Change to a new fibre plan and keep your existing contract end date.

If you are out of contract and want to Plan Change to the new plan then you would need to sign a new contract.

A contract isn't just there to cover install costs, as with any business you can get a better supplier deal by forward-committing (e.g. on bandwidth), which contracts with customers enable- so the aim is better pricing with contracts in place.

Regards FireEngine

tkr001

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Reply # 1131595 18-Sep-2014 17:01

So best to do it one day before contract ends. It is ridiculous to allow in contract customers to keep current end date!

NonprayingMantis

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Reply # 1131596 18-Sep-2014 17:02

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FireEngine:
toejam316: I've discovered that one of Orcon's policies is that on plan change, they wish to re-engage a 12 month contract.

Just to clarify, if you are currently in a contract, you can Plan Change to a new fibre plan and keep your existing contract end date.

If you are out of contract and want to Plan Change to the new plan then you would need to sign a new contract.

A contract isn't just there to cover install costs, as with any business you can get a better supplier deal by forward-committing (e.g. on bandwidth), which contracts with customers enable- so the aim is better pricing with contracts in place.

wait, what?

So if the OP had, say, 10 days left on my UFB contract, he could switch to the new cheaper plan with no penalty at all. 11 days later however, he must take a brand new 12 month contract?

That makes no sense whatsoever.

You are just going to lose customers by doing this sort of thing, or at the very least encourage them to shop around for a better deal.

Demeter

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Reply # 1131604 18-Sep-2014 17:12

NonprayingMantis: That makes no sense whatsoever.

You are just going to lose customers by doing this sort of thing, or at the very least encourage them to shop around for a better deal.

I don't understand your reasoning here. If a new customer had to sign up for a specific deal, they would need to sign a contract to get it. If an existing customer wants the same deal, they need to commit to a contract too. Can you help me understand why this is not acceptable?

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NonprayingMantis

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Reply # 1131672 18-Sep-2014 18:31

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Demeter:
NonprayingMantis: That makes no sense whatsoever.

You are just going to lose customers by doing this sort of thing, or at the very least encourage them to shop around for a better deal.

I don't understand your reasoning here. If a new customer had to sign up for a specific deal, they would need to sign a contract to get it. If an existing customer wants the same deal, they need to commit to a contract too. Can you help me understand why this is not acceptable?

It wouldn't be the same deal.

The new customer would be getting stuff for free in exchange for a contract e.g. free modem, courier fee on the modem, free installation, quite common to give first month free, some account credit or something for the contract.
Plus, in the case of UFB, the ISP has to take a contract with chorus.

If the customer (as with the OP) has been on UFB for 12 months, and is now out of contract then the chorus contract longer applies, they already have the modem, and the fibre is already installed, and up and running.
So re-signing for a new contract makes no sense when the customer is getting nothing in exchange for the contract.

Not only that, but Fire Engine said that customers still within a contract can get the new plan with NO contract extension, but a customer out of contract must take a new 12 month contract. Again, makes no sense. That is rewarding the customer who has been there the LEAST time.

jeffnz

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Reply # 1131690 18-Sep-2014 18:43

so you sign a contract for a product for a set price and duration, now you are complaining because you changed the contract

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Handle9

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Reply # 1131707 18-Sep-2014 19:06

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Demeter:
NonprayingMantis: That makes no sense whatsoever.

You are just going to lose customers by doing this sort of thing, or at the very least encourage them to shop around for a better deal.

I don't understand your reasoning here. If a new customer had to sign up for a specific deal, they would need to sign a contract to get it. If an existing customer wants the same deal, they need to commit to a contract too. Can you help me understand why this is not acceptable?

If you are a new customer you get considerable value for a 12 month contract. You have the option to pay a connection fee and have no contract or you can get a free modem and not pay for the connection. There is a commitment in exchange for value. Entirely reasonable.

For an existing customer where is the value in exchange for a 12 month commitment? This just appears to be a lockin attempt by Orcon which just seems mad to me. What value are they providing in exchange for a 12 month commitment? This is an existing customer who has honoured their contract and all they are asking for is to continue to use Orcon in exchange for the deal they are offering new customers, without the extra costs associated for the Isp.

Personally I'd tell them to stick it and churn if my ISP tried this as it shows not a great deal of respect for existing customers.

FireEngine

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Reply # 1131719 18-Sep-2014 19:20

NonprayingMantis: That is rewarding the customer who has been there the LEAST time.

Customers off-contract usually have the benefit of a great price and no contract period.

In this case, in exchange for an even better price, we ask for a commitment. Yes if you look at two scenario's separated by a few days then you can come up with an edge-case comparison, equally for customers 6mths out of contract they can make an informed decision as to whether to take a price cut in exchange for a new contract, or not - it is their choice. Customers are free to choose whether the price drop vs a new contract is effective for them, or not.

Regards FireEngine

FireEngine

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Reply # 1131721 18-Sep-2014 19:24

Handle9: as it shows not a great deal of respect for existing customers.

Surely it means that customers who stay in contract, get the benefit of great new rates as soon as they occur, without penalty. That is rewarding the most valued customers in return for their ongoing commitment.

Regards FireEngine

richms

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Reply # 1131738 18-Sep-2014 19:45

Or just change ISP if you are out of contract, and get all the new customer perks from the new ISP.

Dont understand why people are so reluctant to change suppliers for things like phone and internet and power etc. There is always a better deal. The contracts are there to slow the changes up. Otherwise I expect people would be popping between ISPs like they do between fastfood resturants.

Richard rich.ms

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