iBurst uncapped battle
In December last year iBurst launched its new broadband pricing. The new pricing included increased data bundle sizes, reduced per-GB pricing and far lower top-up data rates.
As part of its new pricing model iBurst introduced bolt-on Value Added Services (VAS), which includes two uncapped offerings: A 64 Kbps All-day Uncapped service at R199 per month and a 128 Kbps All-day Uncapped service at R249 per month.
The new prices benefitted most of iBurst’s subscribers but there is however a group of customers who are unhappy with the broadband providers’ new pricing. These subscribers argue that they previously received uncapped 64 Kbps access without having to pay R199 per month, and that the new pricing does not provide the same value for money.
Some of the subscribers further felt that they have been lied to by the broadband provider as they can no longer subscribe to the older packages which they say they have been promised by iBurst.
iBurst responds
iBurst CEO Jannie Van Zyl explains that all current customers were migrated to the new packages where they received more bandwidth at the same rate. In some cases, subscribers received up to 400% more data for the same or slightly less spend. “In addition, top-up rates were drastically cut, from R950/GB to as low as R39/GB. At the same time some services such as the 64kbps throttling service became an optional extra that customers would need to pay for,” said Van Zyl.
According to Van Zyl it was initially communicated that the uncapped add-ons would only be available on packages of 5 gigabytes and up, but that this was subsequently revised to be available from Wireless-1 (1GB package) and up. “At this time the 64kbps throttling VAS service was made available free of charge for the first 3 months (Dec 2009 to Feb 2010) to those customers who were migrated as part of the transition period,” said Van Zyl.
The iBurst CEO added that current contract holders have benefitted further as iBurst has migrated them to the higher data packages and given them the 64Kbps VAS for free until their contract period is over. “iBurst subscribers in contract thus got the best of both worlds, the new packages with higher caps and lower top-up rates and the throttled service for free. Only when the contracts ran their course would the free service be dropped,” said van Zyl.
“iBurst never lied to their customers with regards to the new packages and the migration rules – we were upfront about the benefits and the changes to their current packages as well as the migration process at the time,” said Van Zyl.
Most subscribers benefit
Van Zyl explains that most customers are benefitting from the new pricing, and that they made sure contract subscribers get the best of both worlds (higher data usage and the uncapped VAS free of charge) for the duration of their contract.
“The only losers are month-to-month subscribers who typically used the uncapped 64 Kbps service to consume large amounts of data,” said Van Zyl.
The iBurst CEO explains that the throttled service was never intended for high usage, and that a small percentage of users moved tens of GBs per month at a high cost to iBurst. “The original intent of the throttled service was to not have to hard-cap subscribers when they depleted their data bundles and thus give them time to top up while running at a lower speed,” said Van Zyl.
“However, a few subscribers saw this as a method to do very well on P2P services and we clocked some of them doing more than 100Gb/month downloading torrents. This gave them an effective data rate of R1.40/GB, surely the bargain of the year. So, to ensure a more fair usage for all subscribers, we decided to rather introduce a pay-for uncapped VAS service, and pass the cost benefit on to our subscribers in the form of higher usage limits,” said Van Zyl.
Van Zyl says that it is this ‘small group’ of month-to-month subscribers who are now unhappy with the service, but that it is unfortunately not sustainable for iBurst to continue offering the uncapped service to subscribers free of charge.
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