Flat rate:How Much Does It Cost the ISP?

Dangger

Intersting info at ISPReview.co.uk

longword

Originally posted by Dangger
Intersting info at ISPReview.co.uk

I'd like to know the source of their numbers. £150 sterling per month as the cost price of a dialup port seems very high. If it were that bad, it would be worthwhile installing the dialup end-point equipment in the exchanges, like a DSLAM. Users would get better performance. ISPs would have less to maintain. Telecos would lose less inter-exchange bandwidth. Even an expensive wholesale DSL port is just €49 a month.

Balfa

How can the ISPs whinge if people use more than 2.4 hours a day??

If they're selling a flat rate product for £15 a month, and don't want people to use more than 100 hours, why the hell don't they just sell a product for 15p an hour. Then if people use over100 hours, they pay for it, and the ISP doesn't make a loss on them.

I'll tell you why they don't do it that way: because £15 a month for "as much as you want" looks attractive to customers, and these ISPs are relying on peoples' stupidity to sign up and then use it less than they efficiently should.

Sometimes marketing can be an ugly thing. Especially when marketers blame others for their crapness.

neverhappen

The link above is for page 2 of the article.This is page 1.

vinnyfitz

"What follows is a list of recommendations, which we believe all unmetered dialup providers should follow:

Clear Definitions of Usage Restrictions - Making sure to highlight exactly what's meant by maximum or recommended daily use.
Clearly Promoted Restrictions - ISPs must make this available on the service offer pages since they're part of what's being sold, they should NOT just be mentioned in the Terms & Conditions.
Try To Offer Packages Based On Usage Type (hours per month) - This is more economically realistic, easier to control and gives the ISP direct justification for dealing with people who surf over a clear limit.
Price Services Realistically - This should be done with No.1 in mind because there's no set standard for pricing, it's largely based on contention, port cost and usage. Typically these are dynamic unless you set a standard, in which case the ISP has control and should thus negate the need to increase prices."

Should the ODTR be pressing Irish providors to behave in this way?

sceptre

Originally posted by Balfa
How can the ISPs whinge if people use more than 2.4 hours a day??

If they're selling a flat rate product for £15 a month, and don't want people to use more than 100 hours, why the hell don't they just sell a product for 15p an hour. Then if people use over100 hours, they pay for it, and the ISP doesn't make a loss on them.

I'll tell you why they don't do it that way: because £15 a month for "as much as you want" looks attractive to customers, and these ISPs are relying on peoples' stupidity to sign up and then use it less than they efficiently should.

Two reasons I think. One is your reason. "All you can eat" sounds better than "you can eat anything up to four pizzas". Which leads me on to the second reason. People like getting value for money. With "all you can eat" most people will leave off when they feel full. With "up to four pizzas" many will eat that bit more to make them feel like they've had a good deal.

With regard to selling a product at 15p an hour, the high users would migrate to a NoLimits type offering for the reasons mentioned above. Admittedly these aren't the profitable users. They would however, lose all the extra profits they could make from people like my girlfriend's household (still also on NoLimits), who typically use the Net for about 15 hours a month. At the moment, Esat have revenue from that house of £20 a month. If they were paying by the minute Eircom would have revenues of £9 a month from them. Allowing for interconnect charges, Esat are making about £15 a month in profit from that family (obviously it's actually less when you take into account Esat's costs and the VAT off the top of the £20). The bottom line for them is that they always know exactly how much their Internet bill will be and they like that. These are the customers that Esat would make most from in a FRIACO-type offering.