I make this post in response to this thread over here: Vodacom's new data tariffs brings savings of up to 61%
Thank you very much for your response V3G. It's good that you're hurt; it goes a long way to displaying your belief in your company.
From your response it says data is still not data but some kind of scarce commodity; a resource that can tuned to the subjective criteria of the market (or management.) Yes we live in the capitalist world but that does not mean we live in a world without bounds: where we can stick peeps with whatever subjective profiteering motive our company applies. Plain fact: a price drop of 61% shows blatant previous profiteering and the fact these prices have not been adjusted across the board to a flat rate means the game just goes on. And plain fact: if MTN hadn't moved we certainly wouldn't have seen any shift from you.
Things may have changed in our local market (you are sourcing bandwidth from elsewhere or it is cheaper) but why do we always have to be kept in the dark while you play your market games: differential pricing mentioned above?
Much kudos to you and your participation on this forum. Who am I to say anything? But that's supposed to be why we're here. To try get some accountability somewhere, somewhen.
And just to cover it: the european story is documented. Their high rates and their initial layout in spectrum: never mind the infrastructure build (and the far more fragmented market.) VC (all) have ridden on the back of this even though they are thousands of miles away and the market is completely different. Which brings us back to the mysterious alignment with telkom rates which you tell us is not an alignment at all but differential pricing, based on the most used bandwidth packages. Notably bandwidth segments in themselves imposed by the 'realities' of the local market.
Okay, you are not a landline company but you have a large share in someone who is. I almost feel sorry for telkom when I look at my phone bill (and my bill with you is in similar state) but then I consider the reality of what we are dealing with here. Mega companies making mega profits based on >cheap< bandwidth.
Currently prices on SAT-3 are up to US$15,000/Mbps/month, while it is estimated to cost the consortium only about US$300/Mbps/month
[source]
In fact such a ripoff I avoid the phone. I look at relative call charges (sets off to do some UK research.)
And this is the news: you do pay line rental in the UK, ie, you pay for your telephone line rental and call charges on top then broadband on top of that (though no separate broadband line rental as here.)
Annual Line Rental £131.00 (+£12 annual to get cheap international rates)
Phone Charges: P3 a minute flat rate international
Local: P3 minute peak, P1 minute off peak
Broadband BT 8Mb, unlimited: £26.99
All the above comes with various bells and whistles and options.
Or more simply (and Virgin is about the same)
How much does it cost? For a combined phone, broadband and TV package, £26 to Sky and £11 to BT, totalling £37 per month (after a £20 installation fee).
If we add that all up as an annual cost BT + Broadband £466.88 @ exchange of R13, total: R6069.44 verse SA cost (R87.65+R214.91+R218.42, total: R520.98+14%) R593.91 annual: R7127. A difference of R1057.56 (Not to forget this is 8Mb 'unlimited'.)
Then the difference in phone charges, ie, peak rate 3P a minute local and international (plus 3P setup fee.) Verse my last international call R30 for 25 minutes (R1.20 minute verse 39c UK) Or local peak 52c minimum + 34c per minute (according to my bill) + tax (97c verse 60c UK) Of course if I wanted LimitedChoice it would be another R470 odd. I'm not going to even work all that out. Plain fact: we are paying substantially more for our services, and worse what leads me down this path is so is the UK (if we had to start comparing prices with the States.) (Though we can see from the above our international rates are ridiculous and the UK figures come with a lot of perks and sliding scales and discounts, none of which we receive in our local market.)
The point of my lengthy post? UK prices above can surely be found a lot cheaper. Even cheaper if you wanted to duck and dive amongst the rates.
This is all started as a VC post and mysterious alignment with Telkom. We argue that the UK market is not representative of our own but one thing for sure; cheaper as they are it is still 'real' money. Last time I looked UK has very similar population figures to us. 8 million have cable tv.
And what does this all come down to? Telkom charging exorbitant rates for international bandwidth (reflected as well in the telephone rates) plus the minuscule offerings in comparison to our european brethren. No realisation that we are living in the real world here. Then we have the comparison with mobile rates; where 'we' are lauded for our competitive pricing verse a market that cost substantially more to setup and astronomical costs for spectrum in the first place. An excuse for our local mobile companies to keep the price high while playing hand in glove with telkom. Let's never forget the vast profits these companies make annually: last time I looked BT made a 'modest' profit (after years of losses due to investment.) Can the same be said here? Non. We just keep wrapping it as tight as we can while the two biggest players sit on their laurels raking it in. Ill making. And much as we have the VC hooray club on this forum I think it is pitiful.
We/I really do laud your 61% but in fact there is no reason not to be a telkom killer besides the telkom paradigm of "the average user" and your espousing of the european model (mobile is naturally more expensive.) Best exemplified by your "90th percentile of bundles used" and that 'natural groove' the sudden price jump between 2 and 3GB packages. (I also note that the 'smallest' BT package is 5GB, which on an 8MB line is probably minuscule, ie, the casual surfer email user. IOW our famous 'average' telkom 1.2GB user.)
So no. Data is not data. It is some amorphous substance that you can stick some arbitrary price on. In the real world they call it profiteering. The sign of a monopoly or a collusion. The fact you make such vast profits every year is clearly indicative that we are paying vast amounts for our services; otherwise you would make less profits. So at what point does it become simple piracy against a captive market? Unless something has tremendously changed the 61% reflects simple previous piracy (quite happily continued until MTN made their move, much kudos to them.)
And now the absurdity of "percentile bundles used.' Why can't anybody ever call it what it is? It is digital. It is data. Amazingly the UK has different rates for data; they encompass VOIP and wifi. They give choice, they don't ignore it. They don't mess around with smoke and mirrors, the bright lights dazzling our eyes.
Seems most of us own cellphones. The wonders of MXit. Why does everything have to be a pitched battle suddenly acceded by MTN; or simply won by them. Telkom has no reality. It has a shrinking fixed line business propped up by digital rates (and things like line rental for DSL.)
Which takes us back to that original quote: "US$15,000/Mbps/month, while it is estimated to cost the consortium only about US$300/Mbps/month."
Somewhere this model is extremely broken; your 61% is the cherry (notably not aligned across packages.) Pity. We are being constrained. Told to play nicely. If every vocal peep on this forum represents 10% of a market somewhere then (largely) our sentiments of general dissatisfaction are clear. We truly cheer the 61% and MTN's efforts (we wonder what factor came into play?)
And I point you at this quote:
So where is it?
So firstly, no collusion with Telkom. Actually I'm hurt, not a nice accusation....
For this round of adjustments, we focused on the 90th percentile of bundles used, these being 500M, 1G and 2G. I.e. these are, by far, the most popular bundles and these got the most attention in terms of restructuring.
On either side of this grouping (<500M and > 2G) the price changes were not so aggressive or none at all. Smaller bundles were not changes at all.
Thank you very much for your response V3G. It's good that you're hurt; it goes a long way to displaying your belief in your company.
From your response it says data is still not data but some kind of scarce commodity; a resource that can tuned to the subjective criteria of the market (or management.) Yes we live in the capitalist world but that does not mean we live in a world without bounds: where we can stick peeps with whatever subjective profiteering motive our company applies. Plain fact: a price drop of 61% shows blatant previous profiteering and the fact these prices have not been adjusted across the board to a flat rate means the game just goes on. And plain fact: if MTN hadn't moved we certainly wouldn't have seen any shift from you.
Things may have changed in our local market (you are sourcing bandwidth from elsewhere or it is cheaper) but why do we always have to be kept in the dark while you play your market games: differential pricing mentioned above?
Much kudos to you and your participation on this forum. Who am I to say anything? But that's supposed to be why we're here. To try get some accountability somewhere, somewhen.
And just to cover it: the european story is documented. Their high rates and their initial layout in spectrum: never mind the infrastructure build (and the far more fragmented market.) VC (all) have ridden on the back of this even though they are thousands of miles away and the market is completely different. Which brings us back to the mysterious alignment with telkom rates which you tell us is not an alignment at all but differential pricing, based on the most used bandwidth packages. Notably bandwidth segments in themselves imposed by the 'realities' of the local market.
Okay, you are not a landline company but you have a large share in someone who is. I almost feel sorry for telkom when I look at my phone bill (and my bill with you is in similar state) but then I consider the reality of what we are dealing with here. Mega companies making mega profits based on >cheap< bandwidth.
Currently prices on SAT-3 are up to US$15,000/Mbps/month, while it is estimated to cost the consortium only about US$300/Mbps/month
[source]
In fact such a ripoff I avoid the phone. I look at relative call charges (sets off to do some UK research.)
And this is the news: you do pay line rental in the UK, ie, you pay for your telephone line rental and call charges on top then broadband on top of that (though no separate broadband line rental as here.)
Annual Line Rental £131.00 (+£12 annual to get cheap international rates)
Phone Charges: P3 a minute flat rate international
Local: P3 minute peak, P1 minute off peak
Broadband BT 8Mb, unlimited: £26.99
All the above comes with various bells and whistles and options.
Or more simply (and Virgin is about the same)
How much does it cost? For a combined phone, broadband and TV package, £26 to Sky and £11 to BT, totalling £37 per month (after a £20 installation fee).
If we add that all up as an annual cost BT + Broadband £466.88 @ exchange of R13, total: R6069.44 verse SA cost (R87.65+R214.91+R218.42, total: R520.98+14%) R593.91 annual: R7127. A difference of R1057.56 (Not to forget this is 8Mb 'unlimited'.)
Then the difference in phone charges, ie, peak rate 3P a minute local and international (plus 3P setup fee.) Verse my last international call R30 for 25 minutes (R1.20 minute verse 39c UK) Or local peak 52c minimum + 34c per minute (according to my bill) + tax (97c verse 60c UK) Of course if I wanted LimitedChoice it would be another R470 odd. I'm not going to even work all that out. Plain fact: we are paying substantially more for our services, and worse what leads me down this path is so is the UK (if we had to start comparing prices with the States.) (Though we can see from the above our international rates are ridiculous and the UK figures come with a lot of perks and sliding scales and discounts, none of which we receive in our local market.)
The point of my lengthy post? UK prices above can surely be found a lot cheaper. Even cheaper if you wanted to duck and dive amongst the rates.
This is all started as a VC post and mysterious alignment with Telkom. We argue that the UK market is not representative of our own but one thing for sure; cheaper as they are it is still 'real' money. Last time I looked UK has very similar population figures to us. 8 million have cable tv.
And what does this all come down to? Telkom charging exorbitant rates for international bandwidth (reflected as well in the telephone rates) plus the minuscule offerings in comparison to our european brethren. No realisation that we are living in the real world here. Then we have the comparison with mobile rates; where 'we' are lauded for our competitive pricing verse a market that cost substantially more to setup and astronomical costs for spectrum in the first place. An excuse for our local mobile companies to keep the price high while playing hand in glove with telkom. Let's never forget the vast profits these companies make annually: last time I looked BT made a 'modest' profit (after years of losses due to investment.) Can the same be said here? Non. We just keep wrapping it as tight as we can while the two biggest players sit on their laurels raking it in. Ill making. And much as we have the VC hooray club on this forum I think it is pitiful.
We/I really do laud your 61% but in fact there is no reason not to be a telkom killer besides the telkom paradigm of "the average user" and your espousing of the european model (mobile is naturally more expensive.) Best exemplified by your "90th percentile of bundles used" and that 'natural groove' the sudden price jump between 2 and 3GB packages. (I also note that the 'smallest' BT package is 5GB, which on an 8MB line is probably minuscule, ie, the casual surfer email user. IOW our famous 'average' telkom 1.2GB user.)
So no. Data is not data. It is some amorphous substance that you can stick some arbitrary price on. In the real world they call it profiteering. The sign of a monopoly or a collusion. The fact you make such vast profits every year is clearly indicative that we are paying vast amounts for our services; otherwise you would make less profits. So at what point does it become simple piracy against a captive market? Unless something has tremendously changed the 61% reflects simple previous piracy (quite happily continued until MTN made their move, much kudos to them.)
And now the absurdity of "percentile bundles used.' Why can't anybody ever call it what it is? It is digital. It is data. Amazingly the UK has different rates for data; they encompass VOIP and wifi. They give choice, they don't ignore it. They don't mess around with smoke and mirrors, the bright lights dazzling our eyes.
Seems most of us own cellphones. The wonders of MXit. Why does everything have to be a pitched battle suddenly acceded by MTN; or simply won by them. Telkom has no reality. It has a shrinking fixed line business propped up by digital rates (and things like line rental for DSL.)
Which takes us back to that original quote: "US$15,000/Mbps/month, while it is estimated to cost the consortium only about US$300/Mbps/month."
Somewhere this model is extremely broken; your 61% is the cherry (notably not aligned across packages.) Pity. We are being constrained. Told to play nicely. If every vocal peep on this forum represents 10% of a market somewhere then (largely) our sentiments of general dissatisfaction are clear. We truly cheer the 61% and MTN's efforts (we wonder what factor came into play?)
And I point you at this quote:
So where is it?
