Rationale Behind Change Of Plan 'Direction'

Discussions regarding new & existing plans and other Exetel initiatives
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ForumAdmin
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Rationale Behind Change Of Plan 'Direction'

Post by ForumAdmin » Tue May 11, 2010 10:48 am

Exetel introduced an 8 hour free of peak download period (from Midnight to 8 am) on 1st March 2004. Since that time we have continued to offer such a 'bonus' on various terms and conditions and for different time periods. We have had many problems along the way - the first being the introduction and then rapid build up of P2P usage which forever changed the way bandwidth provisioning could be looked at. However for much of the past over six years we have been the leader in providing off peak 'bonus' downloads.

The recent introduction, first by AAPT and then by TPG, of unlimited 24 hour a day usage makes off peak bonus periods less useful than they were and the progressive adoption of off peak period free usage' by more and more ISPs (now including Optus) has made the attraction of off peak bonus periods a bit too "me tooish" to have the same value they used to have.

So, the latest Exetel ADSL1 and ADSL2 plans have no peak/off peak periods and are simply aimed at the majority of Exetel's (and probably the majority whole Australian ADSL user base) customers whose monthly downloads are less than 10 gbytes. Of course there are still more than a million 'heavy' download users who "need" far more than that and it seems to me that AAPT and TPG are the logical choice for such users in the future.

I can't tell you what the costs of providing services are to the last dollar and cent - there are confidentiality clauses in all of our supply contracts that prohibit doing that.

I can tell you that it costs Exetel (gst included) approximately 40 cents to provide each gigabyte of data to an end user.

I can also tell you that it costs Exetel not far short of $40.00 per month to provide a customer with a 1500/256 kbps ADSL1 port.

It costs Exetel not much less than $40.00 for an ADSL2 + telephone line port and almost the same to provide a Naked ADSL2 port with a BYO ADSL port costing Exetel not much less than $25.00 a month.

If you look at what you download in any one month and your service type you can work out how much, if anything, Exetel 'makes' from selling and providing you a service. I can tell you that, overall, we make a loss from providing ADSL services over the past 6 or so months compared with making a small profit over the previous six years. We cannot afford to sell at a loss so we will have to take sensible steps to eliminate that problem before it becomes serious - what those steps are has not been decided yet.

We are not complaining about any of this - we set the plans/prices we believed were necessary over the past years and we have no issue with any customer using the plans they selected as they saw fit.

However we obviously got the 'mix' wrong as the various providers began to make very significant changes to their offerings....again no complaint from us....we continued to make up our own minds on what we would offer.

So the new plans, by and large, do not cater for people who download heavily and they don't provide scope for any plan to lose us money. What they have been aimed at is to provide around 60% of the ADSL1 and ADSL2 market with the lowest cost plans by service type for people who download less than 10 gbps to 30 gbps per month and highly competitive plans up to 90 gbps per month.

The current plans in use by all customers will remain for the current users - they just won't be offered to new users.

Today, we received the first applications for the new fibre plans and, you may have noticed, they are being offered on a purely 'pay for what you use' basis which is the way we will offer all future broadband plans.

Then again, things may change again tomorrow and we will have to think again.

pecifieote
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Re: Rationale Behind Change Of Plan 'Direction'

Post by pecifieote » Tue May 11, 2010 12:46 pm

I do prefer pricing that reflects 'user pays' principle as describe in my post - http://forum.exetel.com.au/viewtopic.php?f=288&t=36130
I have greater confidence knowing that I am paying in accordance with my usage of the service and I am not indirectly subsidising the excessive user. Continued financial viability of Exetel company is my desire too because this gives me confidence the service will be continual and that I am not placing undue burden upon others. Pricing structure should be designed so that no-one is able to cause financial loss to Exetel - more cost should simply incur more charge according to set guideline. I oppose 'all you can eat' mentality as this promotes gluttony and wastefulness.

May I ask whether it costs Exetel the same amount if a customer download one gigabyte during peak compared to offpeak period, or is off peak cheaper?

tomdavies
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Re: Rationale Behind Change Of Plan 'Direction'

Post by tomdavies » Tue May 11, 2010 1:32 pm

Typo "less than 100 mbps per month" -- I think you meant 10GB?

Thank you - I've fixed the typo.

Michel
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Re: Rationale Behind Change Of Plan 'Direction'

Post by Michel » Tue May 11, 2010 2:00 pm

Sounds great but would love to see a off peak period which instead of having a seperate allowance just only uses 1/2 your quota.

ForumAdmin
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Re: Rationale Behind Change Of Plan 'Direction'

Post by ForumAdmin » Tue May 11, 2010 2:12 pm

pecifieote wrote:I do prefer pricing that reflects 'user pays' principle as describe in my post - http://forum.exetel.com.au/viewtopic.php?f=288&t=36130
I have greater confidence knowing that I am paying in accordance with my usage of the service and I am not indirectly subsidising the excessive user. Continued financial viability of Exetel company is my desire too because this gives me confidence the service will be continual and that I am not placing undue burden upon others. Pricing structure should be designed so that no-one is able to cause financial loss to Exetel - more cost should simply incur more charge according to set guideline. I oppose 'all you can eat' mentality as this promotes gluttony and wastefulness.

May I ask whether it costs Exetel the same amount if a customer download one gigabyte during peak compared to offpeak period, or is off peak cheaper?
Off peak between 2.30 am and 7.30 am is lower cost to Exetel because it is the lowest period of use and therefore we could 'give it away' as other wise it would be wasted. Except for that scenario bandwidth is bandwidth - time of day makes no difference.

autron
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Re: Rationale Behind Change Of Plan 'Direction'

Post by autron » Tue May 11, 2010 9:24 pm

Thank you for taking the time to present this explanation in such detail. I always appreciate the level of communication that Exetel provides, it is like no other company I have been a customer of.

However, it has brought up a question for me. With VOIP being so good, I rarely use my PSTN phone any more and following the announcement of the shorter off-peak hours, I reacted last week by applying to move from my IncTel plan to a higher peak quota (but lower monthly cost) NoTel plan. While this is good for me, it looks from your info about similar port costs that it might be bad for you.

I am very happy with all of Exetel's services and I don't particularly want to be asked to leave in the future so is the change to naked something that I should withdraw or is the difference inconsequential?

Thanks

Mutha
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Re: Rationale Behind Change Of Plan 'Direction'

Post by Mutha » Tue May 11, 2010 10:12 pm

ForumAdmin wrote:The current plans in use by all customers will remain for the current users - they just won't be offered to new users.
No sarcasm intended whatsoever...but for how long this time? Or has the business plan changed to truly 'grandfather' existing plans and concentrate on new customers (i.e. there will be no forced plan change come Sept 1). Either way, very sensible commercial decision to rescind the original intent & well done on the explanation to advise as such.

jubba
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Re: Rationale Behind Change Of Plan 'Direction'

Post by jubba » Tue May 11, 2010 10:19 pm

Mutha wrote:No sarcasm intended whatsoever...but for how long this time? Or has the business plan changed to truly 'grandfather' existing plans and concentrate on new customers
well you seem to realise that exetel change plans as times change. Of course if exetel can't sustain the current users on current plans. (if older plans are costing exetel more than newer plans), then prices will go up for these plans as we have seen for other grandfathered plans. I suspect it will happen after abt 12months as contracts expire.

Mutha
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Re: Rationale Behind Change Of Plan 'Direction'

Post by Mutha » Tue May 11, 2010 10:35 pm

jubba wrote: well you seem to realise that exetel change plans as times change. Of course if exetel can't sustain the current users on current plans. (if older plans are costing exetel more than newer plans), then prices will go up for these plans as we have seen for other grandfathered plans. I suspect it will happen after abt 12months as contracts expire.
As with everything (after all it is Budget night) price increases are expected. Perhaps I should have worded the question better - is there any shorter term intention (less than 12 months) in Exetel's business plan to 'require' existing users to change plans to the now current ones?

ForumAdmin
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Re: Rationale Behind Change Of Plan 'Direction'

Post by ForumAdmin » Tue May 11, 2010 10:38 pm

autron wrote:Thank you for taking the time to present this explanation in such detail. I always appreciate the level of communication that Exetel provides, it is like no other company I have been a customer of.

However, it has brought up a question for me. With VOIP being so good, I rarely use my PSTN phone any more and following the announcement of the shorter off-peak hours, I reacted last week by applying to move from my IncTel plan to a higher peak quota (but lower monthly cost) NoTel plan. While this is good for me, it looks from your info about similar port costs that it might be bad for you.

I am very happy with all of Exetel's services and I don't particularly want to be asked to leave in the future so is the change to naked something that I should withdraw or is the difference inconsequential?

Thanks
It's entirely up to you. If you understand the actualities of how Exetel provides plans then you would realise that we make very little money form the activity but we are happy to do it and take the consequences of our actions....it is, after all, entirely our choice.

TijN
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Re: Rationale Behind Change Of Plan 'Direction'

Post by TijN » Tue May 11, 2010 10:46 pm

"There Will Be No Change To Exetel Plan Peak/Off Peak Times" email.

I read the whole email, thanks for taking the time to explain what was happening and why the sudden emails earlier in the week.

Mag
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Re: Rationale Behind Change Of Plan 'Direction'

Post by Mag » Wed May 12, 2010 6:47 am

I'm on TL-C2 which is 36GB + "unlimited" from 12pm-12am which effectively translated to around 80GB the last time I checked. I'm happy with the plan and the price and even though I don't use the 80GB overnight, it's comforting to know that it's there in case I need it.

However if I want to recommend Exetel to a new client, then the equivalent plan would be FP-C2 @ $60/month and 'unlimited' off-peak downloads.
Now how do I read that or explain to a prospective client what the plan actually includes, considering this quote from the letter below?:
Of course there are still more than a million 'heavy' download users who "need" far more than that and it seems to me that AAPT and TPG are the logical choice for such users in the future.
Perhaps I'm reading it wrong, but are you suggesting that it's better for prospective P2P users to go to another isp?
What does 'No limit=Unlimited' actually mean?

I too, don't want to see Exetel going broke over this. As far as I'm aware, Exetel don't charge for uploads while more and more companies do. Considering that uploads are about 15%-20% of plans, that's a real saving for users and is one of the reasons for why I recommend Extel.

oldman
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Re: Rationale Behind Change Of Plan 'Direction'

Post by oldman » Wed May 12, 2010 8:13 am

I appreciate the 'There Will Be No Change To Exetel Plan Peak/Off Peak Times' email I received yesterday, however, I am unsure now as to whether I have to change plans by June 30 as per the 'Cease Plan Of Your Current ADSL Plan' I received on 7/5. As that particular email didn't mention the peak/off-peak issue I assume it still remains valid and I will have to change by June 30... is this understanding correct?

Thank you.

ForumAdmin
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Re: Rationale Behind Change Of Plan 'Direction'

Post by ForumAdmin » Wed May 12, 2010 8:15 am

No plans available to new users have peak/off peak periods.

ForumAdmin
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Re: Rationale Behind Change Of Plan 'Direction'

Post by ForumAdmin » Wed May 12, 2010 8:16 am

oldman wrote:I appreciate the 'There Will Be No Change To Exetel Plan Peak/Off Peak Times' email I received yesterday, however, I am unsure now as to whether I have to change plans by June 30 as per the 'Cease Plan Of Your Current ADSL Plan' I received on 7/5. As that particular email didn't mention the peak/off-peak issue I assume it still remains valid and I will have to change by June 30... is this understanding correct?

Thank you.
No it isn't.

Whatever plan you are now on will not change peak/off peak times for as long as you stay on that plan.

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