iBurst users are being fleeced imho

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bb_matt

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I just received some documentation from iBurst - unsolicited email, but whatever.

It struck me how badly users will be fleeced when this whole thing goes live.
The modem cost !

And then iBurst have the gall to say "No Activation fee"

I'm amazed that anyone would touch iBurst with a barge pole considering :-

1. For a desktop setup, you'll be fleeced R2800 !! - my god, that's unbelievable !
2. Your locked into iBurst once you've got that modem - leave them, and it's a useless paperweight. At least with a DSL modem you can choose your ISP

This means that should the service end up sucking as badly as MyWireless, you've thrown R2800 away. You could buy 6 DSL modems for that cost - heck, you could buy an office bloody computer.

Actually, I'm not amazed - I was part of MyWireless for 6 months - at least I finally realised I was being ripped off even worse than with HellKom.

Sorry iBurst, you aint fooling me and I'll make it my personal mission to suggest people steer well clear of your rip-off service.

It's time the South African public caught a wake-up to this kind of blantant rip-off.
 
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I agree, WBS need to have a major rethink WRT their pricing.

But, I also think the reason WBS believe they can get away with it: Suckingtech led the way: R3500 for IPWireless modem, R500 non-refundable activation fee, R70 delivery charge.

So even if you take a 24 month MW contract & don't buy the IPWireless modem upfront, you still shell out R570 that you will never ever see again.

Added: With Telskum, it's a R404 non-refundable installation fee, which is a bit higher than I think it should be, but there does actually appear to be some work done at the exchange and people's homes. The Suckingtech R500 is much like the Telskum R250 downgrade to HomeDSL384 fee.

The Kyocera UTC/UTD might be less expensive than IPWireless, but R2100 and R2800 is still a wack of doe.

But the cost of the equipment is not what concerns me, it's the monthly subscription fee, and specifically what you do not get for your money, that is what concerns me.
 
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I don't think that a R404 installation fee is all that rough considering a technician must be dispatched to your premises and then to the exchange.
 
The Telskum DSL installation fee isn't that rough taken on its own, but add to it the rest of your startup costs, as well as your monthly subscription, and haven't you now been raped & pillaged by Telskum? Hasn't that techies smoke break at your home & exchange been paid for a few thousand times?
 
I think if you don't take the contract and take the Desktop Device and after 1,2 or 3 months you don't like the Service.

You should be able to return the Device to i-Burst and they give you back most of your Money and they can resell the Device as a 2nd Hand Device for less.
 
There is no way on god's green earth I'm paying R2800 for a proprietry piece of hardware. Even a satellite decoder, dish and installation is less.
 
Running the Numbers

I find the comparison with satellite quite interesting since DSTV and iBurst are in very different stages of their life cycles at present. If we go back to a comparable era for DSTV I find the following using Google:

"Satellite receiver sales in doldrums
24/4/1997
Jonathan Rosenthal

Johannesburg - Leading retailers are up in arms over poor margins and sales of satellite receivers and have called on satellite broadcaster MultiChoice to subsidise decoder boxes to boost disappointing sales.

...

Much of the animosity stems from a MultiChoice advertising campaign last year - which drove prices on systems down to a recommended retail price of R3 999."

So, paying extra is part of the price of living on the bleeding edge. The consumers that follow will get it cheaper!

The comparison to ADSL is quite interesting too. When looking at whether or not to try iBurst I did a total cost/discounted cash flow comparison over two years. As far as ADSL was concerned, I used a price of R800 for a decent Ethernet ADSL modem and took account of the installation fee of R404. I used Home DSL 384 plus the cheapest ISP I could find, X-DSL, for the monthly costs. As far as iBurst was concerned, I used the UTD at R2800 and took account of the discounted monthly subscription up to March 2005.

Here is the table for month-to-month and 24 month contracts using the current prime rate as the discount rate for the discounted cash flow.

Code: 
	     ADSL		    iBurst	
	30 day	24 month	30 day	24 month
				
1	 1872	 1072		 3254	  454
2	  668	  668		  454	  454
3	  668	  668		  454	  454
4	  668	  668		  454	  454
5	  668	  668		  599	  699
....
24	  668	  668		  599	  699

Total 	17236	16436		16596	15796

DCF	15525	14732		15059	14039

It would be nice to rerun the numbers with the cancellation penalties for the 24 month contracts, assuming that you cancel after 6, 12, and 18 months but I do not have the data to do so.

Finally, I should mention that iBurst was my second choice. I was going to go with ADSL. I made it through the exchange checker on the Telkom web site that insisted that I use IE instead of Mozilla, I survived the online order form that always crashed, and I got my order in.

The first response was a terse "Sorry, no ADSL in your area" as a voice mail on my cell phone. I tried again, pointing out that their web site said there was, I was 400 metres from the exchange, and that someone a block away had it. Then I was told there was fibre optic in the circuit, so no ADSL. Fine. Time to look for alternatives. Then my query must have duplicated since I got another call telling me that the reason I couldn't have ADSL was that all the ports were taken. You have no idea how satisfying it was to tell Telkom that wasn't a problem since I was trying out the competition. Almost worth a month's subscription all on its own!
 
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It seems you chaps forget about economies of scale i.e many folks like Broadcom, Connexant , Texas Instruments and Alcaltel all sell ADSL solutions where companies just slap their own stickers on without any sort of R&D costs.

Afaik there is only one vendor of iBurst modems and they have to recoup their costs.

It would be interesting to see what the other folks on iBurst overseas paid for their kit or if it was subsidized like a cellphone by a long term contract.
 
ADSL solutions where companies just slap their own stickers on without any sort of R&D costs.
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I'm not paying for a companies R&D - I don't give a damn how they derived thier service, so long as it's honest and good quality.

Why should I pay for the development of the invention as well as the use of it ?
I don't care what stickers get slapped on where, so long as my service and cost is good.
 
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Assuming that on a 24 month contract, what is actually happening is, WBS are giving you finance to purchase your UTD: a sort of hire purchase thing.

Without going into precise interest capitalisation calculations, and also working against stated launch prices, this is what I get:

(Price_of_UTD / 24) == (R2800 / 24) == R116.67

Add some interest, say R8.33 per month
monthly_utd_repayment == (R116.67 + R8.33) == R125

(monthly_subs - monthly_utd_repayment) == (R699 - R125) == R574 == ~82% of R699

So approximately R574 or 82%, goes towards WBS' monthly overheads (salaries, telephone bills, cost of basestations, bandwidth etc etc etc).
The point is, since 82% of your monthly 24 month contract subscription, goes towards covering WBS' running costs, is it reasonable to expect a higher cap than 3Gigs? Also should it be unshaped, and/or un-prioritised?
 
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bb_matt said:
Why should I pay for the development of the invention as well as the use of it ?
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bb_matt,

I agree with you 100%, and I say that as a software developer!

A case study: NCR, manufacturer of ATMs and proprietary software they "develop" in-house. They spew out really crappy software that is devoid of half-decent design, not thoroughly tested, and consequently full of bugs. Not what a bank needs running on their ATMs! But here's the catch, the hardware is actually quite good, expensive, but usually high quality. So NCR charge their customers exorbitant/outrageous prices for the software, those prices are based on years of messing it up, by a bunch of idiotic system architects that aren't qualified to design a wooden pencil let alone complicated systems.

The point is, if as a company you have an invention that requires some evolution before it is ready to serve it's target market, the money spent on evolving the invention into a useful product is yours to recover over time, and not all in one go - the former is called sound business practice, the latter is called fly-by-night-greed. ;)
 
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bb_matt said:
Why should I pay for the development of the invention as well as the use of it ?
Click to expand...

You obviously have never worked in manufacturing or selling a product.

Depending on the lifespan of the product and the potential sales , the costs are simply written off over a time period on a sliding scale with increasing profit.
 
tibby.dude said:
You obviously have never worked in manufacturing or selling a product.

Depending on the lifespan of the product and the potential sales , the costs are simply written off over a time period on a sliding scale with increasing profit.
Click to expand...

No, I just haven't ripped anyone off yet.
 
It's just a case of not targetting their market correctly. They're expecting early adopters (typically those who would be considered power users) to lay out loads of money for a product aimed at the casual user.

If I could get an uncapped and unshaped 1 MBit connection for R600 p/m by paying R3000 I'd abuse my credit card right now. But I sure as hell wouldn't do the same for the neutered offering they have made.
 
Spamtheman said:
They're expecting early adopters (typically those who would be considered power users) to lay out loads of money for a product aimed at the casual user.
Click to expand...

They are smart as we have seen on this very same forum there are always a few chaps who are more than willing to depart with their $$$ and hop from ADSL to MyNoWireless to a local WISP run by two dudes and a fax machine and then to the latest and greatest of them all ... ta dah ... iBurst.

It will not surprise me one bit to read about them dumping their iBurst modems in a few weeks for a Vodocom 3G unit and sing their praises and then to complain about the 1GB cap.

This is our very own a broadband soap opera.
 
tibby.dude, you have a point, but if no-one moans & b1tches about bad service & less than advertised performance, things can only get worse, and you would not have a soapy to watch.
 
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