When will iBurst drop prices...?

[jannievanzyl]

And hence the question raised elsewhere re. Bandwidth booster prices.

Surely someone that has a 10 Gig account should not be paying the same for a 'booster' than someone on a 40 Mb account.

That way more revenue can be recouped from the customers that are not giving iBurst much in terms of monthly subscriptions, whereas those that are already paying a lot every month will get it a a much discounted rate.

So what I am saying is:
If I downgrade my Account to 40Mb I must expect to pay more to top-up. (Which would entice me to move to a higher package if I regularly exceed my monthly bandwidth)
And Vice versa.

Be patient, young man. No one is disagreeing with you.

 

[Volt4ge]

can i just ask if we can get more bandwidth.. atm im paying for a 3gig cap but its very expensive damn never knew that it would work out so expensive to go with iburst.

<---- starts looking at neotels forum

 

[SirFooK'nG]

Volt4ge - I'm pretty sure that they want to impress us with some new options soon. I hope we wont be dissapointed, cause Neoflex is looking very sweet at the moment R999 uncapped and you get a phone line + free minutes etc with it.

 

[Volt4ge]

yeh i know its the only damn ISP in south africa offering affordable packages with benefits

shows u what happens when a european opens a company

 

[SirFooK'nG]

yeh i know its the only damn ISP in south africa offering affordable packages with benefits

shows u what happens when a european opens a company

Actually they are part of Tata - Indian owned ! Give you good bargain and all! Keepin it schweet!

 

[Volt4ge]

:O rly? wow thought it was a european but hey good bargains!

 

[JustinB]

And hence the question raised elsewhere re. Bandwidth booster prices.

Surely someone that has a 10 Gig account should not be paying the same for a 'booster' than someone on a 40 Mb account.

That way more revenue can be recouped from the customers that are not giving iBurst much in terms of monthly subscriptions, whereas those that are already paying a lot every month will get it a a much discounted rate.

So what I am saying is:
If I downgrade my Account to 40Mb I must expect to pay more to top-up. (Which would entice me to move to a higher package if I regularly exceed my monthly bandwidth)
And Vice versa.

I get what you're saying, but from a different perspective (and to spark constructive debate), data is data and shouldn't cost more. Its a commodity, 1gb here is (technically) the same as 1gb there, and therefore shouldn't cost more. (The caveat there is bulk orders, by signing a contract for 10gb of data, there are cost-savings to be had.) BUT, the value-adds would be the difference... so I'd think ideally there'd be a model where customers choose the level of service and bandwidth they want, e.g.

- Download speed - faster = more expensive
- Amount of data - priced per gb or uncapped
- Static vs. dynamic IP
- e-mail facility yes/no
- support - e.g. 24hr vs live-chat vs. I'm not sure
- etc.

I'm not an expert on ISPs costs and pricing, but I'd think there's room for improvement i.t.o. assessing where the costs are being generated, and why (is it 20% of users generating 80% of the costs?) - then seeing if its feasible to recover these costs as part of the monthly subscription vs. offering the costly activities as a premium add-on to reduce the price of the core offering.

 

[PeterCH]

I get what you're saying, but from a different perspective (and to spark constructive debate), data is data and shouldn't cost more. Its a commodity, 1gb here is (technically) the same as 1gb there, and therefore shouldn't cost more.

Then why is 1GB = R199 and 3GB R499 (R167/GB)?

Pricing is usually tiered. In this case a subscriber who is on a higher cap should get cheaper boosters, although ideally all boosters should go down to ADSL level - under R100/GB.

 

[Gekco]

Then why is 1GB = R199 and 3GB R499 (R167/GB)?

Pricing is usually tiered. In this case a subscriber who is on a higher cap should get cheaper boosters, although ideally all boosters should go down to ADSL level - under R100/GB.

My point exactly.

 

[aalwees]

The booster prices remind me of the inkjet industry - the way they lure you in with low machine prices and then milk you for the ink. Except of course, in this instance, the "machine" price is also high. It makes you feel like you've been had and they're laughing all the way to the bank and there's nothing you can do about it.

 

[Gekco]

I get what you're saying, but from a different perspective (and to spark constructive debate), data is data and shouldn't cost more. Its a commodity, 1gb here is (technically) the same as 1gb there, and therefore shouldn't cost more. (The caveat there is bulk orders, by signing a contract for 10gb of data, there are cost-savings to be had.) BUT, the value-adds would be the difference... so I'd think ideally there'd be a model where customers choose the level of service and bandwidth they want, e.g.

- Download speed - faster = more expensive
- Amount of data - priced per gb or uncapped
- Static vs. dynamic IP
- e-mail facility yes/no
- support - e.g. 24hr vs live-chat vs. I'm not sure
- etc.

I'm not an expert on ISPs costs and pricing, but I'd think there's room for improvement i.t.o. assessing where the costs are being generated, and why (is it 20% of users generating 80% of the costs?) - then seeing if its feasible to recover these costs as part of the monthly subscription vs. offering the costly activities as a premium add-on to reduce the price of the core offering.

Some interesting other issues raised which deserve merit.

But if Data is Data and is priced :

Its a commodity, 1gb here is (technically) the same as 1gb there, and therefore shouldn't cost more.

Then to refer back to your earlier post re. this...
What is to stop everybody from migrating to a 40 MB contract then?

 

[JustinB]

Then why is 1GB = R199 and 3GB R499 (R167/GB)?

Pricing is usually tiered. In this case a subscriber who is on a higher cap should get cheaper boosters, although ideally all boosters should go down to ADSL level - under R100/GB.

Because the number of gb's is not the only part of the subscription. There's a fixed cost element (staff, buildings, admin, etc) and a variable cost element (the number of gigs).

What is to stop everybody from migrating to a 40 MB contract then?

I assume you're referring to the alternate pricing model I was suggesting, I'd guess the bulk-saving of pre-ordering 10gb.

 

[aalwees]

Another thing I'd like to say here, is I admire the way iBurst attends to this forum, but I'm still waiting for the day I get a response from Jannie about the deeper, underlying bandwidth and price issues raised here.* What's the story Jannie? Its nice to see you encouraging feedback and responding to some of the details re this or that package configuration, but I still want to hear what you have to say about the big picture in this country and how iBurst plans to respond. Why the deafening silence? Afraid of the Minister? Is there a line you have to tow? Am I just a whacko conspiracy theorist? Is it just not proper for a man in your position? Does it become a political matter? Please put me out of my misery and at least say why you don't want to say anything about it.

* http://mybroadband.co.za/vb/showthread.php?p=3025441#post3025441
* http://mybroadband.co.za/vb/showthread.php?p=3023885#post3023885

 

[Gekco]

I assume you're referring to the alternate pricing model I was suggesting, I'd guess the bulk-saving of pre-ordering 10gb.

I somehow do not see that working.
That would necessitate keeping the price of Bandwidth boosters high (as they currently are..) to dissuade people from moving onto lower packages and then buying cheap top-ups as needed.
In effect what will be created is a pure pay-as-you-need system.

In effect I think what is keeping those booster prices high are exactly those low end packages.
A tiered system as suggested by PeterCH is the only way to really lower booster prices without encouraging mass migrations to lower end packages

 

[PeterCH]

Because the number of gb's is not the only part of the subscription. There's a fixed cost element (staff, buildings, admin, etc) and a variable cost element (the number of gigs).

Fixed costs have been factored in already - they always appear so we can ignore them for the sake of the discussion.

A person buying a 3GB booster pays (a little) less per GB than the one who buys 1GB. In the same light a person who subscribes to the 10GB package may also pay less than one who pays only for the 40MB one.

However, I would prefer an overall drop in boosters for everyone.

 

[PeterCH]

The booster prices remind me of the inkjet industry - the way they lure you in with low machine prices and then milk you for the ink. Except of course, in this instance, the "machine" price is also high. It makes you feel like you've been had and they're laughing all the way to the bank and there's nothing you can do about it.

True. iBurst booster prices are out of whack with their main pricing. 10GB account = R999 but 6GB boosters = R998???

It is cheaper to run 2 10GB accounts then and have an effective 128kbps softcap than 16GB of b/w on a single account. The two accounts would of cause cost iBurst more - as it's an extra connection.

 

[JustinB]

I somehow do not see that working.
That would necessitate keeping the price of Bandwidth boosters high (as they currently are..) to dissuade people from moving onto lower packages and then buying cheap top-ups as needed.
In effect what will be created is a pure pay-as-you-need system.

In effect I think what is keeping those booster prices high are exactly those low end packages.
A tiered system as suggested by PeterCH is the only way to really lower booster prices without encouraging mass migrations to lower end packages

It works that way now in other companies - e.g. Virgin Active charge more p.m if you're on m2m vs a 12 month contract vs a 24 month contract.

And no, it doesn't necessarily mean that booster prices will remain high, it means they'll be higher than the most expensive contract offering - but not simply the contract price divided by the number of gb - i mean the true cost per gb after stripping out the fixed cost portion.

To give you an idea, I'm saying, for example:
Fixed portion of subscription = R100
Price per gb = R50
Discount for contracts = 5% for under 5gb, 10% for under 10gb, 15% for 10gb

Then a 3gb account would cost R242.50 vs a 10gb account at R525. If you were to use 10gb on a 3gb account, it'd cost R50 for the oob gigs, so R592.50.

Fixed costs have been factored in already - they always appear so we can ignore them for the sake of the discussion.

Yes, they have been factored in to the subscription price which distorts the price per gb as I've illustrated above - but they can't be ignored.

I'm not saying that iburst's pricing is right, I'm saying the contrary, that they have a bit of work to do, because as you've pointed out, there are arbitrage opportunities currently.

 

[PeterCH]

And no, it doesn't necessarily mean that booster prices will remain high, it means they'll be higher than the most expensive contract offering - but not simply the contract price divided by the number of gb - i mean the true cost per gb after stripping out the fixed cost portion.

The non-bw portion of the account has nothing to do with tiered booster prices. In fact iBurst used to offer or still does, cheaper boosters for people on larger caps than on smaller caps - it was a 2 tier system - for caps under 1GB your booster cost 50% more.

Also to suggest someone should pay iBurst more money if they are on m2m than on contract is crazy - contract customers already get their modem, essentially for free or for 1/4 the price of the outright bought modem.

 

[JustinB]

The non-bw portion of the account has nothing to do with tiered booster prices. In fact iBurst used to offer or still does, cheaper boosters for people on larger caps than on smaller caps - it was a 2 tier system - for caps under 1GB your booster cost 50% more.

Also to suggest someone should pay iBurst more money if they are on m2m than on contract is crazy - contract customers already get their modem, essentially for free or for 1/4 the price of the outright bought modem.

Modem costs can be a seperate item that gets added on at the end. I do not think it is crazy to charge more for m2m vs. contract, it is perfectly justifiable. Otherwise everybody would be on m2m. And then when Neotel becomes a viable alternative, everyone cancels at the drop of a hat. It makes business sense to prefer contracts to m2m, and it makes sense to offer a discount for contract vs. m2m to incent the customer to take out a contract.

I'm a customer too, I am on m2m, but the benefit of m2m is it is more flexible, and flexibility costs! I also want everything for free, and I want my cake and I want to eat it, but one has to appreciate that we, as customers, always think we pay too much for something, we are always looking for a better deal.

To get back to my point, ISPs have done themselves a disservice, they are not "service" providers, they are bandwidth resellers, which is why the comparison is made purely on who's giving the best rate per gb. They have commoditised their products, and the only way to then compete is on price. If this is the case, then they must strip out costs to ensure their price is competitive on their core offering (i.e. price per gb of bandwidth), and charge for other services which add on to the costs.

 

[JustinB]

The non-bw portion of the account has nothing to do with tiered booster prices. In fact iBurst used to offer or still does, cheaper boosters for people on larger caps than on smaller caps - it was a 2 tier system - for caps under 1GB your booster cost 50% more.

If you re-read my example, I did not say anything about fixed costs contributing to booster pricing, I said R50 per gb - and you get discount if you sign up for a set amount per month - if you exceed that, you pay R50/gb.