SEACOM price cuts will take time

[Keeper]

If I buy oranges from Mr. Scum (only farmer) at 20cent per orange, and sell them to you
at R1.00 (profit plus transport and other costs) and I make say 25cent profit,

AND

along comes Mr. Com, selling me oranges at 2cents per orange, I can surely sell my oranges
for 18Cents cheaper, and still make EXACTELTly the same profit, NO?

Or did I waste my dad's money on an education?

correct.

also remember, if oranges were in great need you would be raking in more money, even if the profit margin remains the same, as you would be selling a lot more oranges (opposed to another farmer still selling them for R1,00 - which only sells a few oranges per day, with his truck of oranges just sitting there, going to waste)

 

[Keeper]

What you are forgetting are all those local supply issues and marketing you have to spend on now to make it known that your oranges are cheaper

False - word of mouth is the best advertising, and you don't need to use a cent on silly adverts if your prices are competitive.

Adverts can only work so long when people realise the truth, where a good product at a good price will remain popular.

 

[cyberbob1979]

False - word of mouth is the best advertising, and you don't need to use a cent on silly adverts if your prices are competitive.

Adverts can only work so long when people realise the truth, where a good product at a good price will remain popular.

Well, from the point of view of s certain "Orange" company

 

[AirWolf]

Who really cares what iBurst thinks - they only offer up to 1Mbps, while ADSL is up to 4Mbps and the cell operators HSDPA is up to 7.2Mbps.

They will disappear into oblivion.

 

[ettubrute]

Am fully with Rouxenator on this one: told you nothing will happen, except for bigger profits reported!

 

[ike]

Am fully with Rouxenator on this one: told you nothing will happen, except for bigger profits reported!

i see telkom being the one to start the price war. soon it's going to be the only way for them to generate any kind of revenue, especially with VC revenues no longer there...

 

[PeterCH]

If I buy oranges from Mr. Scum (only farmer) at 20cent per orange, and sell them to you
at R1.00 (profit plus transport and other costs) and I make say 25cent profit,

AND

along comes Mr. Com, selling me oranges at 2cents per orange, I can surely sell my oranges
for 18Cents cheaper, and still make EXACTELTly the same profit, NO?

Or did I waste my dad's money on an education?

I think their issue is that if cheap b/w floods the market, the local infrastructure won't hold and they'll have to upgrade it and spend money that way. Well, iBurst anyway - because some places are slow, while others like mine are fast, yet if my neighbours started downloading more than now,
mine would also go slow.

I think its the same with backhaul on 3.5G networks and WiMax.

 

[george_vg]

On the point of spending lots of money on advertising...Why not just advertise on mybb...*rpm will love me*

Word of mouth travels much faster and carries more weight in my opinion and personally, I use this as my first source of tech & telco info

 

[Keeper]

Am fully with Rouxenator on this one: told you nothing will happen, except for bigger profits reported!

You think because 1 company can't understand that the undersea cables are going to change the game, because THEY won't change, that no-one else will?

let me ask you, if you had always paid X amount for Y amount of bandwidth, and suddenly you can get it for 10% of the original price you will not make your products cheaper? even if that meant that you will grow with more users?

you telling me that you will do the same as iBurst, and then lose all your customers to other providers that DO charge a bit less?

You WILL lower prices when you start losing revenue due to more and more users leaving you behind.

Only one company needs to realize this (and i'm sure many have, already)

ISP X will lower prices, get an influx of new users, along with users switching camps, and other ISP's will follow

it's called competition - and it can, does, and WILL happen - mark my words.

 

[Gatecrasher]

The problem for iBurst is that their over-contended, aging network is not capable of providing more bandwidth at lower prices. They need things to remain just the way they are. If the per-gig rate drops, they're basically screwed because there is a physical ceiling on the total gigs they can deliver without incurring crippling new infrastructure costs.

 

[LabAnimal]

Over the years its become clear that iBust is a bunch of idiots, thus they will never have my business!

I'm not ecstatic with Neotel's performance either, but truth be told, if they had to drop their uncapped prime prices, or Telkom for that matter (should they offer Uncapped which is doubtful!) I will switch!

Whoever gets the price right - i'm there!.

 

[Keeper]

The problem for iBurst is that their over-contended, aging network is not capable of providing more bandwidth at lower prices. They need things to remain just the way they are. If the per-gig rate drops, they're basically screwed because there is a physical ceiling on the total gigs they can deliver without incurring crippling new infrastructure costs.

sounds quite plausible to me.

surely they should of known this, though?

 

[PeterCH]

The problem for iBurst is that their over-contended, aging network is not capable of providing more bandwidth at lower prices. They need things to remain just the way they are. If the per-gig rate drops, they're basically screwed because there is a physical ceiling on the total gigs they can deliver without incurring crippling new infrastructure costs.

Correct.

However, current 3.5G cellular networks (VC, MTN) have similar issues although probably more cash to upgrade. Still these corporate execs like to keep costs down and profits up = bonus time hence they'll use most of the savings from cheaper int b/w to upgrade their infrastructure and for profit.

 

[Slash69]

haha. i like the ending. haha I think we can make a song with the title **** you Mr Biggs, its got a nice ring to it

LOL - EddG - You mean something like this, played to a hard rock beat?

It was a dark time in old SA
Bandwidth consumers were doomed to pay
Through their bums for bad service
But chaps like Mr B, had a purpose. (Not saying any specific name here intentionally)

{Chorus}
He wanted to drain us of every last drop
They wanted to bleed us and wouldn't stop
One day too many saw the light
Many people called out to unite
And they all screamed in unison:
"**** you Mr B, You are all a bunch of useless pr*cks"

Time passed and more came online
Still the rips-off continued to thrive
But one by one, the people saw,
How bad things got and would take it no more.

{Chorus}
He wanted to drain us of every last drop
They wanted to bleed us and wouldn't stop
One day too many saw the light
Many people called out to unite
And they all screamed in unison:
"**** you Mr B, You are all a bunch of useless pr*cks"

One day Mr B awoke,
To find his empire up in smoke
For too long, they had ruled the roost
Mr. Consumer had given them the boot.

{Chorus}
He wanted to drain us of every last drop
They wanted to bleed us and wouldn't stop
One day too many saw the light
Many people called out to unite
And they all screamed in unison:
"**** you Mr B, You are all a bunch of useless pr*cks"

Now the playing fields are level,
Let’s hope things go better
Finally we can also watch, YouTube and Transmit video to friends on Skype
But this has been a very long and hard fight.
Let’s hope…

{Chorus}
He wanted to drain us of every last drop
They wanted to bleed us and wouldn't stop
One day too many saw the light
Many people called out to unite
And they all screamed in unison:
"**** you Mr B, You are all a bunch of useless pr*ck

 

[ettubrute]

You think because 1 company can't understand that the undersea cables are going to change the game, because THEY won't change, that no-one else will?

let me ask you, if you had always paid X amount for Y amount of bandwidth, and suddenly you can get it for 10% of the original price you will not make your products cheaper? even if that meant that you will grow with more users?

you telling me that you will do the same as iBurst, and then lose all your customers to other providers that DO charge a bit less?

You WILL lower prices when you start losing revenue due to more and more users leaving you behind.

Only one company needs to realize this (and i'm sure many have, already)

ISP X will lower prices, get an influx of new users, along with users switching camps, and other ISP's will follow

it's called competition - and it can, does, and WILL happen - mark my words.

/me looks at the south african motor industry to see whether prophecy will work... NOT!

Car prices go up, although demand is down! Economics? Upside down economics maybe, but SA falls for it!

 

[Keeper]

/me looks at the south african motor industry to see whether prophecy will work... NOT!

Car prices go up, although demand is down! Economics? Upside down economics maybe, but SA falls for it!

You telling me if all of them suddenly get new vehicles for R20,000 instead of R200,000 they will still be selling them for R250,000 ?

me thinks not.

Compete with Pricing or go the way of the dinosaurs

 

[ettubrute]

Compete with Pricing or go the way of the dinosaurs

I agree, but unfortunately I've become a pessimist with regard to corporate greed and how easy it is to shaft people in Africa... Remember, a pessimist is an optimist with experience!

I hope I'm wrong!

 

[brilliantt]

Prices will come down! It is impossible to stop prices from coming down. Mr Biggs and Co can watch and weep. This time, the human propensity for greed is on our side. There is absolutely no limit to the lengths people would go just to make money. If the big ISP's were to try to stay expensive, a plethora of small ISP's would rise up just to fill the void. Unless Telkom increases the line rental by a huge factor, prices will go down. I predict that on the 4th of July (today is June the 4th), I will get 2 times my 3G bandwidth for the same price and 3 times my adsl bandwidth for the same price. And that is just the beginning.

 

[Keeper]

don't know about your predictions, but you are 100% spot on with the "If the big ISP's were to try to stay expensive, a plethora of small ISP's would rise up just to fill the void." part.

this is a good time to start an ISP, IMO, as Seacom is open to anyone interested.

 

[Creag]

there way of saying we're going to keep the prices up until freezes over!