GWI does a Sentech

buffalobill

buffalobill

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I know this letter received yesterday has been posted in another thread but it's worthy of one itself. And so, here we go again. We're increasing our prices, starting tomorrow. And if you're part of the 2% it won't make a difference to, here's a nice little +100% increase.

The founder of GWISA (Rob Salomon) two weeks ago got backers who were going to be putting in lots of money. He said R200-m. Clearly, the bean counters have decided this is an easy way to screw over customers. Bugger contracts and bugger any reasonable notice periods.

Should I tell them to go take a hike, what are my most affordable alternatives? I'm near Northcliff Corner and doing 10-12gb a month

GWI has some exciting news for you. We are upgrading our networks to provide you with faster and better service. Starting in the next few weeks you will notice faster connections to the Internet, fewer dropped connections, and substantially reduced outages. We have embarked upon this upgrade because our customers asked us to improve our services without a price increase.

In addition to our network improvements we are also introducing several new service packages to meet the needs of all our customers. We will no longer be offering uncapped service as part of our service offering because 98% of our customers use less than 3GB per month and you will notice that without a price increase you will still have access to this large bandwidth at an improved service. Beginning October 18th, 2007 we will introduce the following new packages:

Month 2 Month Packages
3 Gigs * R 350.00 (R 450.00)
5 Gigs * R 550.00 (R 650.00)
8 Gigs * R 850.00 (R 850.00)
Size * No CPE (Rental Options)

Bandwidth top ups
500 megs R 85.00
1 Gig R 170.00
3 Gig R 450.00

These packages are designed to provide greater value to our customers who use large amounts of bandwidth while continuing to provide excellent value to our average customers.

If we do not hear from you we will change you to the package which best suits your usage patterns without a price increase. If we are unable to match you to a package we will contact you personally to discuss your requirements.

GWI is committed to provide innovative services at the best rates in the industry. We will continue to improve our networks and pledge to provide the most technologically advanced services in the industry.

Warm regards
Grant Tyson
Marketing Director
 
buffalo, are you on contract with them? If so, and you signed a contract for uncapped, they can't just take that away. If they want to, take them on in court for that R200m they got
 
LandyMan said:
buffalo, are you on contract with them? If so, and you signed a contract for uncapped, they can't just take that away. If they want to, take them on in court for that R200m they got
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My contract just requires one calendar month's notice. Clearly they can't alter the contract (and I will tell them that in no uncertain terms) but they can terminate if I don't buy in. Or I can terminate, depending on what I decide to do. Hence, it's time to do some shopping around.

I must say, I had a feeling of deja vu when I received this letter. It could easily have been sent by Sentech a year ago and we know where they are now. "Askuus baas, ek soek geld."
 
Is it stated in the contract that they are allowed to terminate the contract if you don't fall in line with new packages?

If that is the case, the word extortion comes to mind :p
 
How much were you paying GWISA for your 10-12GB?
 
Right - the much anticipated response by myself on these forums:

I'm going to use quotes from various posts on this thread and this one http://mybroadband.co.za/vb/showthread.php?p=1281132 as a sort of FAQ to why the GWI usage policy change has been decided:

The founder of GWISA (Rob Salomon) two weeks ago got backers who were going to be putting in lots of money. He said R200-m.
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This is true - except for the name (Rob Salomon).
Until now, GWI has been running pretty much at break-even or less. All our previous monetary resources have been depleted, making it necessary for us to seek further investment for expansion & maintenance. The new investors have insisted the company operations be restructured to show a profit, which is understandable and obvious. In our operations cost analysis, we found that 2% of the users consume 40% of the bandwidth, and have decided that in the interests of the other 98% that our policy change to benefit them. Our greatest single operational expense by far is bandwidth.
These benefits will be in terms of capital expenditure arising out of actually making a profit and being able to fund further upgrades and expansion. Part of the upgrade will be a change in wireless technology in many areas.

We're increasing our prices, starting tomorrow. And if you're part of the 2% it won't make a difference to, here's a nice little +100% increase.
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and
They say change is good if it benifets both parties but in this case only one party is going to benifet.
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Not quite - our prices have not increased, just a cap implemented, and the new pricing structure does not start with immediate effect. The capping policy will be implimented sometime early in November, and will most likely be in full effect by December's billing period.
What will change in terms of delivery is that we'll no longer differentiate packages by speed - all clients will have the same speed. This is still to be decided, but will most likely be something like 512 MIR/128 CIR or 512 MIR/256 CIR.
So those clients that are within the capping policy will benefit, others will not.

Clearly, the bean counters have decided this is an easy way to screw over customers. Bugger contracts and bugger any reasonable notice periods.
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Once again - not quite. 98% of our customers won't even notice any difference. The 2% of users that it will affect will no longer have access to cheap bandwidth previously subsidised by the remaining 98%. Although it wasn't worded as well as it could have been in the customer letter that was emailed, there is effectively a notice period.

are you on contract with them? If so, and you signed a contract for uncapped, they can't just take that away.
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All our customer's contracts are on a month-to-month basis, which means that it is only valid for one month at a time. None of our customers are bound by a long-term contract.

Is it stated in the contract that they are allowed to terminate the contract if you don't fall in line with new packages?
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No - as stated, it is a month-to-month contract, and the term of that contract will be honoured. We won't force anyone into anything they don't want.


I wonder if something like this last incident has something to do with the split between GWI and WI ... maybe WI didn't like GWI's underhanded sneakiness?
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You could say - same same but different. Throw the sentence in a hat, juggle it around a bit and you might come out with the words in the correct order... ;)


Damn they charging you double + change for 1gig. Doesnt sound like a company that cares for its customers at all.
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Actually, we do care. The only way we can afford the upgrades and expansion is to control the consumption, and for 98% of our users, this will translate to an improved experience at no additional cost.

a verizon 3gb acc from ISP x costs sub R300......don't even want to know what verizon is actually asking a reseller at cost!
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Believe me when I say that 3Gb @ R350 leaves a *very* slim margin of 'profit' for GWI, which then has to be spent on other operational expenses - tower rentals, electricity, phones, equipment, staff, insurance, etc etc.
You are free to get a quote from Verizon directly and do the math yourself. If you buy 3Gb @ less than R300 (which is about what we pay) then you need to add your transport costs; e.g. ADSL line rental, which costs R245 for a 384k line. Our transport costs are less than ADSL.

Has anyone whom has send a mail to [email protected] had any reply yet.
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Emails will be answered - we have a lot to get through at this stage...


What do u think will the outcome be of lower bandwith pricing debate today, http://mybroadband.co.za/news/Broadband/1647.html
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If and when bandwidth costs do come down, these savings will be passed on to our clients - most likely as increased quotas.
 
Ok i can understand that since ( esp with wisps ) it is very NB to create stability amongst the network with the upgrading to better equipment/software.

But afaik a 1gb international cap is R80 ( roughly ) so you guys are raking in quite a profit in terms of selling prepaid and probably making a killing in the near future.

Given that then, will there come a time where your company will be moving to a paid spectrum? ( since the pricing shows for a good future cash flow )

P.S. Very nice to see a company that regularly responds to queries
 
acidrain said:
But afaik a 1gb international cap is R80 ( roughly ) so you guys are raking in quite a profit in terms of selling prepaid and probably making a killing in the near future.
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Actually not - as I said, we've been running on break-even or less for a while, and even with expected returns from the new policy, it won't be an instant profit. We run a more than fair, if not generous partner program with participating networks and resellers (I think so - compared to some competitors).
It may be news to you that GWI is not one big company, but rather a group of participating WISPs. The idea for participating networks is basically that infrastructure, operational and promotional costs and regulatory issues are covered by the head office in return for a share of the income; and resellers earn decent percentages. The only outlay they are directly responsible for is CPE sales.
Partner networks are free to leave the group, and a few that reckoned they could do better alone or with similar groups have left in our time, and new ones have joined...

By the time it comes to recoup our outlay as head office, it's not all streets paved with gold.

Given that then, will there come a time where your company will be moving to a paid spectrum? ( since the pricing shows for a good future cash flow )
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We are already in the process of moving to a licensed spectrum, and already have a number of clients operating in this spectrum.

P.S. Very nice to see a company that regularly responds to queries
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Thanks - nice to have a compliment occasionally! :p



and in case you're wondering wtf i'm doing hanging around here on a friday night - I'm saving myself for tomorrow -
GO BOKKE!
 
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Just out of interest

How many gb were those 2% guys using on average per user??
 
anywhere from 15 to 50 Gb a month... A higher proportion use more than 3Gb, but the disparity between the top 2% and the rest is the greatest.
 
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Web Intact said:
anywhere from 15 to 50 Gb a month... A higher proportion use more than 3Gb, but the disparity between the top 2% and the rest is the greatest.
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Do if i was using 14gig per month do the math and see what ill be paying on the new package,

R850 for 8Gigs
and the an exstra R900 for a 6gig top up,
total of R1750 for the month, its a whole R1400 per month more.
 
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My understanding is that it won't be a hard cap, but your speed will be throttled...

If so, to what speed?
 
You know what you charge, also that was one of the reasons why we joined GWI, for the attractive rates but it seems all is gonna change
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Duh me... 1750 - 1400 = 350...

You've done well for your money... you won't get a return like that from any bank....
 
diebaas said:
Do if i was using 14gig per month do the math and see what ill be paying on the new package,

R850 for 8Gigs
and the an exstra R900 for a 6gig top up,
total of R1750 for the month, its a whole R1400 per month more.
Click to expand...

In most cases, people who look to download large amounts go for adsl... if not covered there's an option for wimax now ( i mean you dont see ne one on vc or mtn buying 14gb of data )

As i see it ( with the price increase ), you will see far less hogging of the network because people will not be willing to pay too much for extra bandwidth which in turn means that towers/connections will be far more stable and thats what mostly everyone using a wisp hopes to receive.

Long story short: These guys are trying to improve the quality of the service you are paying for but can't upgrade along with the demand because of the fact that they were breaking even. So if by implementing this new pricing they can improve your service quality while effectively running the business then i see it as a win-win situation.
 
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