opinion Those who are currently having a big fat whinge about Internode’s new broadband plans need to harden up and realise that the ISP isn’t trying to gouge users for profits; in fact, it’s one of the only truly honest and transparent companies in Australia’s telecommunications sector.
The current round of complaints about Internode stem from a large round of price and quota changes to its broadband plans made last week. The ISP’s always had a much more complicated plan structure than that of rivals like Telstra, Optus, TPG and iiNet, so it took customers a while to work through the changes and analyse what they meant.
But when they did, they found a lot that they didn’t like.
Most of the complaints seem to revolve around the fact that a 150GB entry level Internode plan had been bumped down in quota to 30GB for the same price.
“I’m on Easy Naked S which has 150GB of data, now for the same price I can have Easy Naked 30 with 30GB?” wrote one user on broadband forum Whirlpool. “Err, I think I’ll stay where I am.” And another added: “Umm $20 more for 50GB more, or 120GB less for the same price as I’m paying now… yeah think I’ll stay on my 150GB $59.95 a month naked plan, thanks :)”
However, others were also alarmed by the removal of a 600GB plan — with there now being no option for customers who wanted a monthly quota somewhere between 300GB and 1TB. And some expressed their frustration at the fact that their current ‘tier’ of plan had been migrated upwards in both quota and price — they didn’t need more quota and didn’t want to pay more for it.
Internode managing director Simon Hackett’s attempts to explain the situation on the company’s blog didn’t seem to make anything better, due to his habit for blaming a number of the changes on Telstra’s wholesale pricing.
“I think this is really going to hurt Internode,” wrote one reader on Delimiter. “They may have the excuse of Telstra Wholesale for their Reach plans but how do they explain the changes on plans that use their own Agile and Optus DSLAMS?” Wrote another: “I won’t be changing my plan, but I will be considering how much longer I’m going to be putting up with Simon constantly trying to nickel and dime me with the excuse of ‘Telstra made us do it!’.”
Now, there is some deal of legitimacy to the ongoing customer complaints. Yes, Internode has raised its prices in some areas, and it has definitely made a number of choices for plan structures which appear to lack ‘intermediate’ pricing — for example, no plans with download quotas between 30GB and 200GB, and no plans between 300GB and 1TB.
In addition, the company, like virtually all of its rivals, appears to be trying to push users into bundling other services with their broadband connection — services like Internet telephony or IPTV, which some customers may not want (hell, we haven’t seen much evidence that the FetchTV offering being sold by iiNet and Internode is getting much traction at all).
However, this doesn’t mean that the price changes which Internode has made are unreasonable or that the company’s not doing its best by users.
Firstly, the company has maintained low value plans for those who just need a basic broadband service and a basic telephone line. Depending on whether you’re on Internode, Optus or Telstra ADSL infrastructure, this will cost you from $59.90 a month, which we think is a fair price.
But Internode’s betting (and it’s right) that most customers will actually be using much more quota — with the 200GB limit being a useful figure for most Australians. With this limit, most people will not likely to run out of quota each month, and Internode’s charging a reasonable price for it — from $69.95 to $79.95. This price is comparable with what you’d pay through other ISPs. As always, TPG has cheaper options (and worse customer service), while you’ll pay more through either Telstra or Optus, and iiNet is about the same as Internode.
We’re less sure why the company has a 300GB plan included as one of its four standard pricing tiers. If evidence suggests that there are is a significant percentage of users exceeding 200GB in monthly downloads, why not set a 400GB or 500GB plan? It just doesn’t seem likely that many users are going to want to pay an extra $20 a month for a mere extra 100GB.
However, this is basically quibbling, as we’re sure Internode wouldn’t have made this change without a great deal of consideration for the usage patterns it’s seen amongst its users. The ISP has a history of constantly tweaking its plans to match changing prices and user behaviour — and we’re sure there is a reason behind the quirky 300GB option.
In actual fact, it looks from Hackett’s blog post that the 300GB plan has resulted from a 50GB increase in quota at the same price point. So perhaps that previous price point represented what Internode considered users would be willing to pay at a certain tier above the mainstream — and it actually added value to it through a 50GB quota increase.
Now, the only place where Internode’s plans really fall down are when it comes to plans on Telstra’s infrastructure. $139.95 for a 250GB plan with a telephone line? $89.95 for a 100GB plan? That’s just plain ridiculous … and we wouldn’t recommend paying these prices if you can escape them by signing up to an Internode plan which uses the ISP’s own infrastructure — or even that of Optus.
Now, whether you slam Internode or not for its pricing on its Telstra-based plans depends on whether you believe Hackett that Telstra Wholesale is making life tough for ISPs. And personally, I do believe the executive.
Hackett’s never been less than up-front and honest with me about Internode’s operations and plans. Sure, there’s been some stuff that he hasn’t been able to discuss — every company has confidential matters which its executives won’t talk openly about with the press — but that’s normal. And he’ll generally tell you why he can’t discuss something.
Then too, a decade before the term “social media” came around, Internode has continually used the Internet to engage directly with its customers openly and honestly about all of their issues; explaining its decisions and listening to complaints. This hasn’t changed; in fact, several Internode representatives have been active over the past week in explaining the pricing changes to customers on forums such as Whirlpool.
In addition, Telstra does have a history of treating its wholesale customers unfairly. In April 2006, for example, the Australian Competition and Consumer Commission issued a competition notice to Telstra for unfair price changes, and companies like iiNet, Internode and Optus have long been engaged in a decade-long war to bring some equality into the relationship with the big T’s wholesale division. The situation appears to have been getting a bit better recently — but I’m inclined to believe Hackett when he says there are still problems.
The ACCC also confirmed to me this week that Internode wasn’t the only company complaining about Telstra at the moment — other ISPs share Internode’s concerns. And there’s also the fact that Hackett has been highlighting the issue since September 2010; with the ACCC not having taken action in that time, but noting this week that it should get to the matter this year.
Also, just one last thing.
Hackett made clear this week that all existing customers would remain on their existing plans at this stage — unless they actively decided to shift to a new plan. That’s right, whingers: You won’t be forced to move if you don’t like the new plans.
The caveat to this is that the Internode MD did note that “a subset of existing customers” who were already outside their initial contract terms may eventually be shifted onto new plans. Reading between the lines, it looks as if Internode just wasn’t making any money on some of the plans (likely the Telstra ones) which it had been providing. It’s a logical and necessary step for it to shift customers on these plans; a company which doesn’t make some margin on product lines which it sells is likely to go out of business eventually. So some customers will have to deal with it — that’s just life. Tough.
So what am I saying with all this?
I guess what I am trying to help people to understand here is that Internode’s not the enemy. Over the last two decades, the company has done its utmost to be fair to customers with its Internet plans, and it’s still doing the same. Would you see the chief executive of Telstra, Optus or TPG go public in an extremely detailed blog post to discuss the rationale behind new broadband plan changes? No.
Does any other ISP have the level of granular plans that Internode does, to offer its customers as many options as possible, depending what infrastructure they’re on? No. Does any other ISP provide as much transparency around its relationships with suppliers? No. Well, maybe Exetel’s John Linton. But he’s one of a kind ;)
Let’s cut Internode some slack and give its new broadband plans a chance, before we damn Simon Hackett and his merry band to the seven depths of hell for their perceived sins.
Image credit: Asif Akbar, royalty free
Look forward to your in depth opinion piece on tpg with their ‘worse customer service’ and supporting evidence.
I want my node pony too.
D
You’re a TPG fanboi, always were always will be. I remember years ago when I used TPG and had issues, yet some how this “MiTH” guy never seemed to peg anything on TPG because he is a TPG RESELLER! Funny enough when I switched to Internode ALL of the issues went away, using the same modem I had with TPG and same Line. MiTH is a self-invested self-interested commenter with no objectivity.
However, Simon Hackett is quickly becoming the new Phil Burgess.
http://delimiter.com.au/2010/08/18/iinet-launches-terabyte-broadband-plans/#comment-15789
same as last time….
D
I’m not sure what you mean by “same as last time” however it’s clear you have ZERO credibility dallas.
As long as you think this is something to aspire to, go knock yourself out.
i still fail to see where i am factually incorrect
for you to try tpg must mean they had something to offer then
as for the arn yarn, yawn, its reads like another 1 sided ‘i’m right, so i’ll go to whoever will print my story’
for tpg now being the number #1 plan in the latest wp survey, well that just shows they must be doing something right
the point of posting in node thread is to illustrate that other isps dont seem to suffer the same cut throat prices from telstra wholesale, as we may be led to believe exist.
back to the game, not the man
D
Dallas, you should have just stopped typing when you reached “I just fail.” That would have sufficed beautifully.
## “back to the game, not the man” ##
I’m not sure if you understand the meaning of hypocrite, however you fit that description rather perfectly. Here’s your opening post, the first comment:
## “Look forward to your in depth opinion piece on tpg with their ‘worse customer service’ and supporting evidence.
I want my node pony too.” ##
So it’s absoloutely fine for you to claim that the author of this article is a fanboi, and insinuate this. However it is somehow unfair that you receive the same treatment? As I said earlier Dallas, you have zero credibility. I personally experienced months of issues with TPG, and your snide self-serving self-interest remarks did nothing to alleviate the situation, yet when I left all my service issues were resolved, simply by switching providers. The same result when I switched more than two dozen other accounts away from TPG over the years as well.
# for tpg now being the number #1 plan in the latest wp survey, well that just shows they must be doing something right
Why don’t you publish their customer support results as well. Anyone can take that mantle away from TPG, just publish a plan at a lower price with higher bandwidth limits, cut out your support, and over-saturate your network so it is practically unusable on international sites after 8pm and you have the perfect ingredients to be a TPG.V2
I’m always entertained by your continual support of TPG, always amuses me how for the sake of a small monthly kickback you will sell all credibility. Well done Dallas, what a role model you are. If you didn’t want to “play the man” you shouldn’t have started it with your opening comment.
can you factually back up any of those claims or do they all come from whingepool?
D
Look at you like a dog running in circles.
You just used “Whingepool” as you title it to give credibility to your claim of TPG’s greatness a few posts up, and now you try and use “Whingepool” as a way to de-credit a statement. Not only are you a hypocrite, as you have now reinforced a second time in as many posts, but you can’t even keep your story straight.
Dallas, why don’t you go climb back under that rock of stupidity that casts a shadow over you so well that the rest of us don’t have to entertain your incoherence.
So I take that as you have no proof.
thanks for making my point.
move on, we have.
D
The fact that I will not entertain your stupidity does not equate to no proof. If anyone wanted proof Dallas all they have to do is read your dismissive comments of users in the TPG forum on “Whingepool” and there’s enough right there.
As I said, you have zero credibility when it comes to objectivity within a discussion. You are a self-interested self-serving individual as you have illustrated yourself on numerous occasions.
I pity you that you think people can’t see you for what you are.
So I take that as you have no proof.
thanks for making my point.
move on, we have.
Back to the game.
D
It’s amazing how you seem to be getting all of these huge assumptions out of a sentence at a time. I don’t know the background, but it seems like you’re putting more words in his mouth than he is actually saying.
You call him a “fanboi”, but I’m going to go ahead and label you “butthurt” which is essentially the polar-opposite of a fanboy and just as bad.
oh, and the opening comment was to the company, not the writer, as you claim, everyone wants a free node pony as it keeps them warm at night
D
You are so full of crap, it was damn clear what you were insinuating and to whom it was. Just because you’re a fool on the Internet doesn’t mean everyone else shares the same intelligence.
Haha… Got to love it when you have to insult anothers intelligence to try and make yourself look smarter. But you Failed!!
Going to agree with this guy here. You are incapable of producing an actual argument based on fact (and tact for that matter) and instead lower yourself to degrading their character.
I’m sure in your messed up little world you have deluded yourself to think you are employing ad hominem in your arguments, but all I’m seeing is personal insults and you making yourself appear to be a butthurt moron to everyone reading. I could go on, but I don’t need to highlight it anymore as you have done so just fine on your own.
MitH, your little friend there seems more excited that he knows your first name instead of coming up any responses of substance.
I want a Pony…
(Now it’s my turn)
I know what you mean Joel, When I moved to TPG and found their customer service abysmal, I turned to whilpool to get some help and learned very quickly to ignore any replies from MitH+1 because he was so clearly biased and just like TPG assumed every issue was the users fault, or when pushed Telstras but NEVER EVER TPG’s issue. It was quite sickening in the end.
Months of fighting finally had TPGthemselves admit the issue was theirs and finally fix it but MitH+1 still continued to jumo into threads blaming the rest of the world for issues and never TPG themselves.
I think the article is correct about TPG’s customer service and im sure theres enough tpg customers who will agree. I’m sure there are plenty of customers with no issues, but thats the thing, when things are going well you dont have to interact with them. But when you have an issue you realise they are perhaps worse than Telstra when it comes to service, at least telstra will throw money at the issue and provide some type of “sorry”. TPG are terrible at customer service AND cheap, which is an awful combination.
Someone at ARN already did that:
http://www.arnnet.com.au/article/393766/yarn_tpg_-_step-by-step_guide_how_alienate_customer_/
“It has been exactly 35 days since I last had an Internet connection at home. I’ve had a lot of time to reflect in these 35 days (thanks to the lack of distraction from YouTube) and I have made one very important decision.
I will never sign up with TPG again.”
Your opinion sucks, You sound like one of the Node Fanbois.
+1 Bob. Also, Internode’s support now sux balls like the rest of them.
Actually I currently (and this is well-known) broadband with iiNet ;) And Hackett and I have had many tussles over the years …
His “opinion may suck” however so does your level of articulation. The internet sure is becoming a breeding ground for the illiterate.
Spoken like a true Fanboi Joel.
The Internet is a proper noun, .Joel. Stop being so illiterate.
Typing well doesn’t mean your retarded opinions don’t make you any less stupider.
That last sentence defines what he meant by illiterate. You get a golf clap for the example though.
I’ve tried Telstra and Optus, and been burned in the process. Internode have always been good to me. I like the fact that if I call them about something, I talk to someone who’s actually in Australia instead of someone halfway around the world. I didn’t even know that people were complaining about the new plans, but now that I do, I’m still sticking with Internode.
Thanks for the clarification, and here I was thinking there might be a chance someone residing outside of Australia may know what they are talking about re telecommunications, silly me, of course, there is no such thing as a useless person employed in a Australian call center, they are all certified network engineers.
@Gav It has nothing to do with whether someone outside Australia is or is not qualified. I would like to speak to someone here in Australia if I have a query or problem, so I make an effort to support companies that employ Australians.
“I would like to speak to someone here in Australia if I have a query or problem, so I make an effort to support companies that employ Australians.”
+1
Because they are in Austrliaa it doesnt mean their help centre is actually better , i have contacted internode help and its confusing if not more then overseas help centres
Really? I hardly ever have bad experiences with Australian call centres … unless we’re talking about Telstra.
For me, the issue with overseas call centres is not that the people working there are incompetent. It is more the fact that the foreign accents can be hard to understand and that the quality of the phone calls, probably run on some really cheap VoIP service, can leave much to be desired. The other day I made an after hours call to the HSBC support line. The lady I was talking to was very friendly, helpful and knowledgable, but I had a hell of a time understanding her Filipino accent over the poor voice line.
Generally when I deal with tough accents/bad line quality I will tell them than I am having trouble understanding them and ask if it is possible to continue our contact via email correspondence (if you have that option via methods such as mobile internet, etc). You’d be surprised how many of them will actually do it and how efficient it makes the overall process. No waiting on hold for followup calls.
Personally I’d prefer to speak to whoever is more qualified, and would prefer to not pay out the arse for it – I’ve had a shocker of a time with some Aussie call centers, and good times with some foreign call centers – it’s not possible to make a blanket assumption on which will serve you better as there are good and useless centers on both sides of the fence.
An interesting point of reference on the support geolocation question: Exetel is very transparent and proud about their call centre in Sri Lanka. John Linton writes about it as a specifically good and positive thing, a kind of humanitarian policy which helps build up the developing world.
I sometimes sense racist undertones when I hear people say “overseas call centres are un-Australian”. I think it’s the quality of the response that really matters, although I do acknowledge there have been times where it’s easier to get an Australian to understand what it is that you need support for. But then too there have been times where the Australian didn’t get it.
“My Summer at an Indian Call Center”
http://motherjones.com/politics/2011/05/indian-call-center-americanization
heh very interesting article
@Drew “John Linton writes about it as… a kind of humanitarian policy which helps build up the developing world.”
A humanitarian policy? Give us a break. The only reason they outsource is because it’s cheaper. If it wasn’t cheaper then they wouldn’t outsource.
Overseas call centres are – by definition – un-Australian. As for you playing the race card, let me remind you that there are Australians of various races working in Australian call centres. The issue is whether those people are working here in Australia, or somewhere overseas.
There’s a Chasers War on Everything skit that comes to mind when I read this…
Australian call centres employ Australians in the tech industry, more jobs in the tech industry means more work for me and the potential for better pay/hours as demand for skilled IT workers goes up.
The big advantage of the internode call centre is I’m normally transferred a maximum of once(and often not event that one time) as I get to the talk to people who can actually resolve the issue. Most out-sourced call centres I get transferee around sometimes back to the same department, Telstra is particularly bad at this took me 3/4 hour and 6 transfers once to find out if an option I was after getting changed on a service was something I couldn’t get adjusted on that server, talked one person at internode given an emails address to send the details of the change to and was all sorted inside the hour without only about 15minutes actual time spent by me..
The problem isn’t overseas the problem is outsourcing as having people who don’t understand your business or customers dealing with issues causes problem.
I’m sure if Telstra had the client base of Internode it could run a Australian call centre out of one medium size office building in Adelaide as well.
Telstra would define a call center of such size a pilot.
Firstly, haha does your picture on the title with the indian dude showing us his palm in the stop! gesture have any reference to TPG? lol
No, I thought their call centres were in Malaysia?
its in manila you ignoramus
You’re right! It is in the Philippines. Knew it was somewhere there up north ;)
manilla , india, china…who cares? same diff? use your brain?
Node are definitely in the wars at present and with some justification, reducing a plans quota from 150G to 30G at the same price point is guaranteed to cause a reaction. In saying that credit should be given for the companies willingness to engage their customers and explain the reasoning behind such changes, something some other I.S.P.s would never contemplate.
Quote of the week from an opposition companies Tech. support after attempting to resolve an ongoing difficult to identify issue ” You might be better off going with Internode” if we can’t resolve this.
Says it all really
Mike
lol would be interested to know which ISP made that statement :)
Yes indeed, assuming it was said at all of course.
I don’t appreciate your assertion alain but understand your skepticism. That exact comment was made 5 times by two different C.S.R.s over the course of three phone calls.
Mike
You still have not said who the ISP is.
Does it really matter, the point being that another ISP believed that Nodes infrastructure/upstream provider would resolve a current issue whereas they may not be unable to.
Mike
Sorry your explanation is (deliberately?) cloudy because of lack of detail, Internodes ‘infrastructure/upstream provider’ is not Internode then, so we are talking about another ISP referring a particular problem/fault to a Internode supplier NOT Internode itself, is that correct?
“You might be better off going with Internode” – I’ve had this exact line as well in the last 12 months from and ISP. And I’ll name the ISP – Optus.
Telstra didnt even get that far, they flat out told me ADSL was would be unavailable from any ISP at my address due to the distances involved. (Internode did get it working with no issues to date)
What’s the big deal anyway – everyone’s had the experience of being advised by one retailer to try a competitor for a product they don’t have. Each company has its strengths and weaknesses. Internode is service quality, TPG price etc
lmao….In one sentence you state this: “That’s right, whingers: You won’t be forced to move if you don’t like the new plans.” but then the next sentence is you may be forced (some customers) and that’s just tough.
Sounds like options are endless. But yeah, the new plans are bad.
Def sounds like your another fanboi, not that there are too many barracking for Node in the thread u are referring to. Seems to have pissed a lot of folk of this time around.
Maybe your doing your friend Hackett a favour by moving all the disgruntled negativity here, instead of the barrage of attacks continuing in WP.
heh I’m not a Node fanboi — I think Hackett himself would vouch for that :)
Careful Renai, a post with the term ‘Node fanboi’ in it would be deleted on Whirlpool by the ‘unbiased’ moderator team, after multiple herrings from the ever vigilant 24/7 Internode customer base that keeps Whirlpool afloat.
:)
Err, What about the term Telstra fanboi… Telstra famboi?
Oh, did you mention “premium Usenet” has stopped being advertised as well plus the fact support wait times have been so bad for the last six months that waiting an hour is rather quick for Internodes standards nowadays.
I know, customers should really not “whinge” at anything Node does or doesn’t do. They are gods of the ISP world.
Internode used to “proudly” provide a graph of their call wait times that proved they were meeting their targets on a daily/weekly/monthly/yearly basis. Now that page has been replaced only with the current times which are 17minutes for Residential Support right now but have been seen to go to 1 hour. Someone should set up a scraper and graph the numbers.
Exetel still have their call wait times on their support page and they are usually under 1min. I have never personally seen over 10 minutes.
There tech support in Sri Lanka are excellent in my experience (only issue I have is I find it hard to pronounce their names). The staff page that shows all the staff, spelling of names and photos helps with this).
I’ve use iiNet and Internode in the past both were hood ISPs but support call wait times were longer and in the end their price premium became too high.
I used TPG for 6 Months, I WILL NEVER GIVE THEM ANOTHER CHANCE.
I have just churned from internode to exetel after being with node for 6 years ie. classic plan 50gb $49.95 TW easy reach plans 60gb for $59.95 EXETEL 200gb for $39.95 still on telstra wholesale so someone is talking PORKYS. have been very satisfied with nodes service but dont need to pay for the support anymore!!!! Sorry so far very happy with my decision.
Let me know how you go next time you need to call Exetel customer service :)
lol…tut..tut…
People in glass houses shouldn’t throw stones. Please don’t bad Exetel’s service when Internodes wait times are and have been the longest in the industry for the last six months.
Then, a customer called up the other day and was enquiring about Usenet and the CSR didn’t know or have a clue what Usenet was.
Scour through the current Usenet thread in Node via WP and you will see said statement.
All my experiences with Exetel support have been excellent. Im particularly happy about the fact they all tend to have the same info so you dont need to worry abput calling back to get a second opinion and yo check the info as you have to do with most Australian company call centres… Telstra, comm bank, dept immigration, centre link etc…
@Allan
If your referring to Exetels OT – 200 plan for $39.95 it uses Optus infrastructure, the Telstra equivalent is more expensive.
This whole scenario highlights why Telstra must be structurally separated, their continuing ability to sell bandwidth internally (Bigpond) and to “selected ” I.S.P. s at varying prices is a travesty and needs to be addressed by the A.C.C.C.
Mike
Well, I think the Federal Government has laid down the ultimate future smackdown on Telstra courtesy of the NBN. Of course, we have a ways to go until it is fully implemented …
@Renai LeMay
“Well, I think the Federal Government has laid down the ultimate future smackdown on Telstra courtesy of the NBN.”
I think Telstra will survive the ‘smackdown’ quite well thank you very much, I’m not sure about other ISP’s though, and this is while the NBN rollout is in the pilot phase!
http://www.itnews.com.au/News/262846,analysis-small-isps-jump-ship-in-face-of-nbn.aspx
The smackdown isn’t a reference to Telstras ability to sell product. It is relating to Telstra’s ability to shift prices underneath its competitors.
Telstra will no longer have an unfair advantage over its competitors.
No one implied that Telstra will go away, or has been directly harmed by the action. (indeed they are $12bn happier)
“Telstra will no longer have an unfair advantage over its competitors.”
So you don’t think BigPond just by it’s sheer bulk of customer numbers which are increasing not decreasing as they at long last offer better value fixed line BB plans coupled with their overwhelming dominance of wireless BB with NextG and soon Telstra LTE selling the same bog standard NBN plans as every other ISP will suffer because it no longer has to wholesale ADSL, LSS and ULL access under ACCC price control?
So you want regulation after all, not free market competition.
What’s that, contradiction #10, 11 maybe?
@Mike
“their continuing ability to sell bandwidth internally (Bigpond) and to “selected ” I.S.P. s at varying prices is a travesty and needs to be addressed by the A.C.C.C.”
Of course Telstra is not the only wholesaler of ADSL2+ and it does not wholesale Naked DSL at all.
I assume you don’t have a problem with the ACCC addressing ALL varying pricing wholesaling to ISP’s from ALL wholesalers not just Telstra while they are at it?
How many Telstra shares do you own, Alain? :)
Is that the best comeback you can manage?
So that’s a YES then, with the amount of TLS shares simply not disclosed…LOL!
I think the main problem behind all of this is BigPond, the gravy train where it was easy to poach BigPond customers at end of contract has come to a end.
BigPond is fighting back because it decided enough was enough with the bleed of their customers to other ISP’s so it is offering better value plans, especially packaged up with landline, mobile and Foxtel, so now -gasp- some customers are leaving Internode for BigPond, once upon a time this phenomenon was unheard of.
Also a lot of complaints about Internode are about lengthy wait times for customer service, what that has to do with with the so called Telstra price squeeze I’m not sure.
A lot the problems hinge around defining ADSL2+ as a declared service, the ACCC have never defined ADSL2+ as a declared service as there are plenty of ADSL2+ wholesalers other than Telstra around, and in fact it was a reason Telstra decided to wholesale ADSL2+ in the first place, Telstra could withdraw wholesale ADSL2+ next week and just retail it if they wanted to, just like TPG does.
But of course no other ISP matches the exchange spread of Telstra, but also keep in mind Australia’s second biggest Telco Optus stopped its DSLAM exchange rollout in 2009, so Optus deciding it didn’t want to expand anymore and compete in that area doesn’t help ISP’s if they want to look for alternative suppliers from Telstra.
Fair article, Renai.
Have you noticed how quickly any post praising Internode attracts responses dropping the term “fanboi”? It takes less time than the cabbie revving his engine behind you takes to beep his horn after the traffic light turns green.
(And it reminds me of the “denier” epithet which scientists were branded with a decade ago when they dared suggest that sunspots might be a factor in the earth’s global temperature cycles – these are of course now a significant factor in NASA’s and NOAA’s climate modelling. Frankly, I don’t mind being called a fan of a good ISP – I’d be pretty stupid not to be.)
The fact is that Simon Hackett has contributed more than most to reliable, cutting-edge, customer-focussed Internet services in Australia over many, many years.
Good luck to ISPs who want to turn themselves into two-dollar-shops. They will always have a share of the market, but I do feel sorry for a lot of their non-technical customers.
I’m an Internode customer and a member of whirlpool, I can spot the Fanbois a mile away. ; )
“The fact is that Simon Hackett has contributed more than most to reliable, cutting-edge, customer-focussed Internet services in Australia over many, many years.”
+1 to this. If Internode and a couple of others like iiNet had not rolled out ADSL2+ over the past decade or so, I shudder to think where we would be today in terms of Australian broadband. And they fought Telstra tooth and claw the whole way to get there.
Well where we would be today is where they all were 14 years ago, total dependence on Telstra Wholesale resell holding firmly onto the ACCC apron strings, with the eventual transition to PMG/Telecom/Telstra Mark 2 thinly disguised as the NBN Co.
The move will be to total and utter dependence on NBN Co resell holding firmly onto the ACCC apron strings, there is one thing you can say about the Australian Communications landscape, the more things change the more things stay the same.
Honestly this is the fault of Internodes business model more then anything
Internet out of all of the “major” ISP’s, has invested the least in capital for infrastructure, which makes them much more reliant on Telstra wholesale then other companies, so its not a suprise that Hackett would whine about Telstra
Thats not to say that the other ISP’s don’t whine about Telstra (they do), its just much less of an issue for them. On last check of the DSLAM rollouts for ISP’s, companies such as TPG and iiNet have at least double the amount of DSLAM’s installed compared to internode.
At this point one would say that this is the result of competition, even though iiNet and Internode have similar business models, iiNet has invested much more into infrastructure, and its paid off them, as it has with TPG and Optus
Well iiNet in particular have used their public sourced funding as a ASX company to buy out the likes of Netspace, Westnet and AAPT, bulking up their customer base, so that coupled with their large DSLAM rollout as you mentioned is a buffer against having to rely on Telstra Wholesale ADSL2+ so much.
One point that puzzles me about this latest plan revision is that I thought Simon Hackett had negotiated a specific contract to be able to offer the previous plans via Telstra Wholesale at special wholesale pricing to Internode. Was this not the case last year? Wasn’t Internode locked into a favourable wholesale price? Any answer to this Internode?
When Simon met with the Telstra Wholesale MD last year what did you talk about that suddenly allowed Internode to offer the better plans? Why has this agreement now ceased?
yet others still offer good rates on telstra wholesaled services
http://www.tpg.com.au/products_services/adsl2plus_pricing.php?/pricing/broadbandoffnet
but then again they negotiated these deals without public ‘blogging’, well before mega-ceo’s cried foul.
Tpg up to #2 on whingepool now (and #1 in plans)
http://bc.whirlpool.net.au/
Our members use
#1 Internode
#2 TPG Internet
#3 iiNet
Popular Plans according to a survey of the whirlpool community
#1 TPG Internet ADSL2+ Unlimited~
#2 Internode Easy Naked S
#3 iiNet Home 5 (bundle)
D
Because the nbn puts majority of isps on equally terms , internode will not be able to get the accc to help them against their competitors like telstra.
So internode is trying to make attempts to get a good profit while they can, getting the accc while the ycan
Hackett and Internode are being left in the dust of the Big 4 (iiNet, Bigpond, Optus and TPG).
Their so called advantage, the fanboi advertised “superior network” is becoming known as a fallacy when placed up against those 4 other companies.
Internode had the chance to become a big player. They failed. iiNet have got ahead of them, TPG became a juggernaut with it’s acquisition of PIPE, Telstra and Optus are big as usual.
I’ve been with Exetel, TPG, Internode and Optus.
Exetel I left due to horrid support, bad network and constant plan changes.
Internode I left because the month after I joined I got a nice email from Simon telling me the price for my plan was going up $50. They also dropped out the support for usenet the week after I started using it.
The only reason I left TPG is because Optus got their act together and put their bundled Cable internet prices down and I was tired of getting crap speed due to being 4 k’s from the exchange.
I would gladly go back to TPG when NBN comes around my place.
This is the beginning of the end for Internode. They have a rusted on group of fanbois, but that won’t last.
It’s a free country, Bob, and I don’t blame you one bit for switching to Optus cable rather than the lousy 2-3 Mbps you get from ADSL2+ when you live 4km from the exchange.
Once the NBN rolls in we will all get a great connection at the premises, but if the choice of provider comes down to upstream reliability and customer service, Internode most certainly has a bright future, in my view.
Your mileage may vary, of course.
“Internode most certainly has a bright future, in my view”
I agree, especially given Internode’s commitment to being ‘first on the NBN’ in every region it is rolled out. I haven’t seen a lot of Telstra customers on the NBN so far.
the deal has only just been signed.
it doesn’t matter who is first. after all, most people are on contracts.
everyone will be migrated in time now the deal is done.
@Renai LeMay
“I haven’t seen a lot of Telstra customers on the NBN so far.”
Well they have thousands more customers than the NBN Co on FTTH though, but that’s not what you meant.
:)
For being a part of the technology industry…they aren’t very innovative.
Who, Internode or Telstra?
:)
Internode. At least you can call Telstra innovative with their wireless products.
Internode 60 gb $59.95 1.5 uploads counted…………… time with 6 years
Exetel 200gb $39.95 1.5 free uploads both on telstra infrastruture 3 days
“Internode 60 gb $59.95 1.5 uploads counted…………… time with 6 years
Exetel 200gb $39.95 1.5 free uploads both on telstra infrastruture 3 days”
Just don’t use 200GB every month on a regular basis as you will become UNPROFITABLE to Exetel and will be told to upgrade to a higher costing plan or told to leave Exetel. You have been WARNED
I like Internode, but seriously this public fellatio of Simon and Internode is just cringe worthy
If internode werent interested in profits then they would be the cheapest of the lot
come on internode face reality , not everyone was born yesterday
“come on internode face” Lol, I totally misread this after reading Steve’s post just above :)
Someone just posted this press release from Internode back in Nov 2011:
“Internode today more than quadruples the reach of its popular Easy Broadband ADSL2+ services by making them available from more than 1300 telephone exchanges nationally.
Easy Reach sets ADSL2+ standard nationally
17-11-2010
After negotiating improved terms with Telstra Wholesale, Internode has overhauled its entry-level broadband services to offer faster speeds, lower prices and improved data quotas.”
So it would seem the negotiated prices only lasted 8 months or so. Care to comment Internode?
i churned to bigpond, best decision i have made, with all the bundling options, i dont worry about the deal im on anymore.
put up with too much shit at internode, and it sadens me that they are starting it again.
Usenet going again, they need to get their act together and offer stable plans.
that’s all most customers ask for, stability & value. all these changes make people pull their hair out. and give it three months, and great plans are back again.
*Most of the complaints seem to revolve around the fact that a 150GB entry level Internode plan had been bumped down in quota to 30GB for the same price… And some expressed their frustration at the fact that their current ‘tier’ of plan had been migrated upwards in both quota and price — they didn’t need more quota and didn’t want to pay more for it.*
Internode’s broadband plan changes are basically the canary in the coalmine in terms of how introducing the $20/Mbit tail circuit data tariff by NBNco will impact broadband affordability going forwards. under the current copper regime, there is no variable data charge on the access network. this means that ISPs can jack up the average gross margins on their broadband plans by offering large quota plans and charging more for these higher price points.
the imposition of the CVC charge on the fibre access network results in an additional variable cost wedge in ISP gross margins which scales according to capacity provisioning. the end result is that plans with large data allowances become very expensive to provision and can only be offered at higher price points. the higher prices also means that there will be fewer subscribers of the larger quota plans meaning that ISPs will no longer get the “lift” to average gross margins from selling larger quota plans.
the upshot of all this is that:
1/ the introduction of the $20/Mbit data tariff on the tail circuit means that the pricing and cost structure of all ISPs (other than those which operate a highly-contended and inferior network) will converge upwards to that of Telstra;
2/ all the major ISPs will be chasing the same types of low data usage, non-leeching subscribers. in other words, the major ISPs will be looking to reshape their subscriber base to reflect Telstra’s user base (i.e. low cost of capacity provisioning);
3/ in addition to the direct impact of the $20/Mbit data tariff on the cost of capacity provisioning for entry-level and mid-range plans, the prices of these plans will also have to rise to compensate for the loss of volume on the higher margin, large quota plans (which will have fewer subscribers due to the significantly higher costs).
this explains why Internode has bumped down the quota for the entry-level plan from 150GB to 30GB for the same price. the ISP is re-positioning the cost structure of its subscriber base (to mirror that of Telstra’s) in anticipation of the substantially higher costs of capacity provisioning under the NBN.
*However, others were also alarmed by the removal of a 600GB plan — with there now being no option for customers who wanted a monthly quota somewhere between 300GB and 1TB. Yes, Internode has raised its prices in some areas, and it has definitely made a number of choices for plan structures which appear to lack ‘intermediate’ pricing — for example, no plans with download quotas between 30GB and 200GB, and no plans between 300GB and 1TB.*
in other words, Internode’s broadband plan structure increasingly resembles Telstra’s (for reasons already explained above). the basic truism of telecommunications is that you make money by charging users for services they don’t utilise (fully). by eliminating the intermediate plans, Internode is forcing its subscribers to hop into a much higher price point while consuming only a fraction of the extra headline capacity offered. as long as the average subscriber adjusts to a higher price point (as opposed to dropping to a cheaper plan) in response to a change in the pricing structure, Internode’s average gross margins will receive a boost.
*In addition, the company, like virtually all of its rivals, appears to be trying to push users into bundling other services with their broadband connection — services like Internet telephony or IPTV, which some customers may not want (hell, we haven’t seen much evidence that the FetchTV offering being sold by iiNet and Internode is getting much traction at all).*
this is driven by NBNco’s cost structure and pricing model which imposes an artificial scarcity of bandwidth on the tail circuit. we are transitioning from $0/Mbit data charge on the copper tails to $20/Mbit on the fibre tails. this encourages economization of bandwidth usage and favours business models that bundle multiple services over the same tail circuit.
*We’re less sure why the company has a 300GB plan included as one of its four standard pricing tiers. If evidence suggests that there are is a significant percentage of users exceeding 200GB in monthly downloads, why not set a 400GB or 500GB plan? It just doesn’t seem likely that many users are going to want to pay an extra $20 a month for a mere extra 100GB.*
as explained above, due to the future imposition of the $20/Mbit data charge on the tail circuit, the pricing structure of the broadband plans offered by the major ISPs will converge higher to Telstra’s existing pricing structure. Internode is just taking the first steps towards re-jigging its subscriber base to reflect the new pricing regime under the NBN. it has to do this to gradually get rid of the “leeches” because bandwidth-intensive users will no longer be economic to service in the future under the existing pricing structure.
*Now, the only place where Internode’s plans really fall down are when it comes to plans on Telstra’s infrastructure. $139.95 for a 250GB plan with a telephone line? $89.95 for a 100GB plan? That’s just plain ridiculous … and we wouldn’t recommend paying these prices if you can escape them by signing up to an Internode plan which uses the ISP’s own infrastructure — or even that of Optus.*
at the end of the day, everyone is using Telstra’s infrastructure. the difference between using Telstra’s infrastructure and using NBNco’s infrastructure is that Telstra’s AVGC charges can be bypassed through LSS or ULL access (hence, the more attractive offerings of “Easy Broadband”, “Easy Bundle” and “Easy Naked”). NBNco’s CVC charge (or $20/Mbit tail circuit data tariff) cannot be bypassed whatsoever.
*Now, whether you slam Internode or not for its pricing on its Telstra-based plans depends on whether you believe Hackett that Telstra Wholesale is making life tough for ISPs. And personally, I do believe the executive.*
normally, when Telstra raises quotas across the spectrum of their broadband offerings, other ISPs are forced to do the same to maintain the relative attractiveness of their plans. if an ISP has a higher cost of provisioning capacity at a given (fixed) price point due to the new (higher) quota, they will experience a “margin squeeze” unless Telstra lowers the wholesale cost of capacity. if ISPs don’t increase quotas in parallel with Telstra, they will lose market share over time.
this is what Internode said in its blog:
statement #1: “The 200GB ‘Easy Reach’ plan has been removed in favour of new 100GB and 250GB plans. These new plans are at effective price points that are more expensive (on a price-per-quota basis) than the old 200GB plan.”
statement #2: “Meantime, absent of any ACCC activity to encourage appropriate change, our most recent wholesale pricing negotiations have failed to yield any effective improvement in our access costs. In fact our effective wholesale access costs have actually risen in some geographic areas despite movement in the opposite direction in applicable retail pricing conditions.”
now, there are essentially three factors that can result in a “margin squeeze” for a given price point:
1/ factor #1 – lower plan pricing for a given price point (lower $/GB)
we can discount this factor as Internode’s first statement clearly points out that even the new “250GB” plan is more expensive in terms of $/GB.
2/ factor #2 – the cost of capacity provisioning has increased (due to higher volumes)
now, Internode has replaced the “200GB Easy Reach” plan with two new plans, “100GB” and “250GB”. if you assume an even split of previous “200GB” subscribers across the two new plans, Internode’s new capacity requirement has actually fallen in terms of this specific change to its “Easy Reach” plans;
3/ factor #3 – the cost of capacity provisioning has increased (due to higher prices)
now, Internode’s second statement suggests that:
i/ on the whole, wholesale access costs haven’t improved (or fallen);
ii/ in a minority of instances, wholesale access costs have actually risen.
based on this, one can only surmise that any mooted “ongoing margin squeeze” hasn’t been caused by rising average wholesale access costs (in terms of unit price). otherwise, Internode’s second statement would have been phrased differently:
“Meantime, absent of any ACCC activity to encourage appropriate change, our most recent wholesale pricing negotiations RESULTED IN HIGHER access costs.”
furthermore, the second sentence highlighting a counter-trend rise in wholesale access costs in some geographic areas would have been redundant and unnecessary.
on the whole, all the evidence suggests that the radical changes in plan pricing across all types of plans (using DSLAMs provided by different vendors as well as naked plans) reflect the first step in a broader strategic move to align Internode’s subscriber base and cost structure towards an optimised model that reflects the new pricing regime under the NBN – and NOT due so some mythical (market-wide) “wholesale margin squeeze”. isolated instances of “margin squeeze” in minor geographic pockets do not explain the scale and extent of the current shake-up in Internode’s broadband offerings.
Epic post is epic.
“isolated instances of “margin squeeze” in minor geographic pockets do not explain the scale and extent of the current shake-up in Internode’s broadband offerings.”
Thing is that internode has significant portion of their market in those isolated geographic pockets, which is why they are complaining so much about it
The problem is compounded when your other main wholesale partner Optus has stopped its DSLAM rollout and has stayed away from low yield areas.
But then cherry picking exchanges for DSLAM rollouts is and always has been the prerogative of non-Telstra competitors, leaving Telstra solo to take up the regional and rural slack.
*Thing is that internode has significant portion of their market in those isolated geographic pockets, which is why they are complaining so much about it*
it would be interesting to have some precise numbers on that, as well as the % split between “TW DSLAMs” and “other DSLAMs”.
but Internode also says this in the blog:
“We must operate on a financially sustainable basis in the meantime, and we do trust that the wholesale price squeeze currently in place will ultimately be resolved, especially outside of ‘zone 1’.”
so, all these “margin squeezes” (which reflect the slow and lagged adjustment of TW prices to Telstra’s revised retail offerings) are temporary in nature and are eventually resolved. assuming that this latest “price squeeze” is resolved in a couple of months’ time, does that mean Internode will then:
1/ bump up the quotas on the entry-level plans back up to 150GB from 30GB;
2/ reintroduce plans with intermediate quotas and price points;
3/ reverse the price/quota synchronisation of the naked vs the non-naked plans?
if the “margin squeeze” is transitory, wouldn’t it seem more rational to temporarily absorb the “margin pain” or, at least, confine the plan adjustments to the “Easy Reach” plans (which are directly impacted by the “margin squeeze”), than to institute wholesale changes to the broader broadband offerings only to subsequently reverse all the changes (when the “margin squeeze” is finally resolved). instead, it seems to me that something bigger is at foot and these plan changes are permanent in a “structural” sense.
they also say this in the blog:
“Should the ACCC take appropriate enforcement action that drives improvement in our wholesale access costs then we will be very happy to develop and release appropriate new Easy Reach plans to reflect that improved access cost.”
so, they will revise their “Easy Reach” plans following a successful resolution to the “wholesale margin squeeze”, but no suggestion that they will reverse the significant changes made to the other non-“Easy Reach” plans. this could imply that the latest changes to the “non-TW” plans are independent of the problems currently experienced with TW pricing.
actually, there’s a more obvious criticism of my interpretation of Internode’s statement:
“Meantime, absent of any ACCC activity to encourage appropriate change, our most recent wholesale pricing negotiations have failed to yield any effective improvement in our access costs. In fact our effective wholesale access costs have actually risen in some geographic areas despite movement in the opposite direction in applicable retail pricing conditions.”
what Internode could, in theory, mean is:
1/ wholesale pricing went up many moons ago;
2/ successive negotiations since then have failed to produce a reversal in prices
3/ the latest broadband plan changes are a delayed reaction to changed market conditions
however, there are countervailing factors against this interpretation:
1/ ISPs are still rolling out new (competing) DSLAM infrastructure and ULL take-up is still growing rapidly;
2/ as a result, the trend decline in average TW pricing is well-entrenched (because Telstra needs to stem the market share loss from the higher margin TW product to the lower margin ULL and LSS products);
3/ the most recent major market shift (or “squeeze trigger”)* was a massive increase in quotas across Telstra’s retail offerings (e.g. the data allowance on the most expensive Bigpond plan jumped from 20GB to 200GB);
4/ consistent with these plan changes were anecdotal reports of a substantial drop in AVGC charges soon after. (these reports have some logical credence because the ACCC would have gone ballistic if average TW pricing actually rose following these massive changes in Bigpond plan quotas).
as already discussed, Internode’s “Easy Reach” plans generally have not gotten cheaper, nor have quotas increased. (all Internode has done is split their highest price point into two new price points while preserving, or, possibly even, boosting margins.) so, any “margin squeeze” must emanate from the cost side of the equation, specifically, in the form of higher average TW unit pricing.
while it is possible that TW pricing has actually gone up in absolute terms in some geographic pockets and Internode has proportionately greater subscriber numbers in these pockets than other ISPs, the overall evidence of a general “margin squeeze” driven by higher average TW pricing (faced by Internode) is muddy.
also, Internode’s complaints of poor outcomes of pricing negotiations with TW has to be viewed in the context of their ongoing roll-out of new DSLAM infrastructure. logically, Telstra should be offering better wholesale pricing to ISPs who rely entirely on TW for DSLAMs because, otherwise, ISPs which have their own DSLAMs (and hence, a lower cost structure) would be in a position to undercut the ISPs which do not (thereby, undermining the market share of the TW product relative to ULL and LSS).
the only remaining possibility for a “margin squeeze” is that the increased attractiveness of Telstra’s retail broadband offerings has resulted in an actual net migration of subscribers from Internode to Bigpond (i.e. a “subscriber volume” or “market share” impact on gross margins). this is improbable as the primary result of the improved Bigpond plans has probably just been a slower (or cessation of the) erosion of retail subscribers from Telstra to the other ISPs.
this is why i’m skeptical that the radical shake-up of Internode’s broadband offerings is due to a mooted “wholesale margin squeeze”.
* “plan improvements” are most likely driven initially by LSS/ULL activity at exchanges with competitive backhaul, which ultimately triggers a response from Telstra in the form of 1/ improved Bigpond retail offerings and 2/ lower TW pricing at these specific exchanges. this leads to a “price squeeze” for ISPs competing with Bigpond at exchanges without competitive backhaul who are wholly-dependent on unchanged TW pricing at these exchanges.
I know it sounds simplistic, but I think this latest complaint about so called price squeezing is caused by one main driver, BigPond, as they are competing for the first time after many years of being the most expensive ISP in Australia in the competitor ISP heartland – value.
Non Telstra ISP’s love promoting the concept of ‘competition’ as being the reason for their existence, as long as BigPond doesn’t do the competing of course.
*I know it sounds simplistic, but I think this latest complaint about so called price squeezing is caused by one main driver, BigPond, as they are competing for the first time after many years of being the most expensive ISP in Australia in the competitor ISP heartland – value.*
yea, but that’s the thing. before Bigpond bumped up their plan quotas, they were so out of sync with the rest of the market in terms of stingy quotas – so, they were just playing catch-up. in terms of cause and effect, it’s a chicken and egg thing. the trigger for them to move was probably because “unlimited” plans became increasingly widespread. and even after bumping up their most expensive plan from 20GB to 200GB, their retail offering in general is still “poor value” compared to the other players. just compare the Easy Reach plans with the non-Easy Reach plans – that gives you a good idea of where Bigpond stands relative to the rest of the market. of course, Telstra is just trying to protect their revenue streams.
i think Internode probably IS being squeezed relative to other market players at certain exchanges and this probably has to do with them rolling out new DSLAMs and hence improving their current or future cost structure. Telstra has to try to “offset” this increased cost competitiveness by selectively increasing TW pricing to ISPs which have an increasing % of non-TW DSLAMs to protect the market share of competing ISPs who rely entirely on TW (and, in doing so, also protect the market share of higher margin TW product relative to LSS and ULL).
at the retail level, it will be interesting to see in the 2011 Annual Report whether Bigpond’s retail subscribers have actually increased or continue to decline. but at the moment, given the huge value gap between Bigpond vs rest, i really don’t see Telstra retail as a big threat to the other ISPs other than at exchanges with no LSS/ULL. in this regard, deteego made a good point that Internode have more subscribers in these outer zones. but as i’ve said, this may be due to Internode rolling out (or planning to) new DSLAMs in outer regions (possibly taking advantage of the new regional backhaul built by DBCDE? isn’t that meant to immediately improve ADSL access for regional residents while waiting for the fibre to come?)
We don’t have to wait for the next Financial Report, I don’t think there is any doubt that BigPond have stemmed the exit flow and are making inroads into other ISP’s customer bases.
Their latest media release to the ASX early this month indicates as such:
“We have made considerable progress over the past two years, especially in the nine months to March 2011 when more than one million Australians returned to Telstra,” Mr Thodey said.”
http://www.telstra.com.au/abouttelstra/download/document/tls783-telstra-structure-geared-to-customers-growth.pdf
I’m one who returned their landline to Telstra a few months ago. We don’t make any outgoing calls on it and rarely get an incoming as the whole family have ‘all-you-can-eat’ or company-paid-for mobile plans. So Telstra’s Homeline budget plan of $20.95pm makes sense.
And Bigpond’s $88pm Homeline Budget/200Gb makes even better sense for me, however, their Internet filter stops me going there at present.
Oh … and I was planning on bundling my landline with Internode after the 3 month contract period with Telstra was over. Now, since Internode’s recent plan changes, I don’t trust Internode anymore so my landline will be staying with Telstra.
I take it you are so intellectually challenged you need to double post instead of actually construct a coherent argument. Which is exactly your behaviour on “Whingepool.”
What life must be like for you, trawling the internet all day trying to pretend to be of importance.
you talking to me? are you kidding me? internet forums are all about exchanging ideas, not people. i’m a person of zero importance. what’s more – a few years from now, none of these micro discussions will matter anymore because the caravan will have long passed.
you must an upset little NBN fanboi. (i do apologise for making you scroll.)
No he wasn’t talking to you. He was talking to MtH above but it fell down here when a duplicate post was deleted.
*facepalm*
oh dear. in that case, i also apologise profusely for calling him “an upset litlle NBN fanboi”. :<
Tosh said… “Internet forums are all about exchanging ideas, not people. I’m a person of zero importance”.
Gees, I agree with Tosh…
First sentence above, indeed… and to go one step further maybe one day you’ll even be able to remove the shackles which restrain you and be able to not only exchange ideas, but actually accept others ideas. Ideas which imo, do not adhere to your obviously preconceived and set in concrete political bias. As a consequence, you will then not feel the need for long winded, rhetorical, snide replies and/or excuses!
But then again… what do they say about pigs and flying!
Second sentence… definitely agree 100%, your best and most truthful statement yet…!
@.Joel
“instead of actually construct a coherent argument.”
It seems coherent enough to me, MitH is only copy & pasting results from Whirlpool as to what ISP’s and Plans members use and posting links to TPG resold Telstra prices, what’s not coherent about it?
BTW that should be ‘constructing’, it makes your argument more coherent.
Internodes Biggest mistake and Toshs’s biggest mistake of the year is:
“NBNco’s CVC charge (or $20/Mbit tail circuit data tariff) cannot be bypassed whatsoever. ”
Of course it cannot be bypassed, your using NBN, the data goes to a central point, rather than to a certain ISP.
Thats why Internode hates it.
Conflict of INTEREST.
Does the NBN mean all the non-TW DSLAMS in a particular exchange will be nothing but junk once the NBN hits that area?
Yes and Telstra’s as well once the copper network is totally decommissioned in a particular exchange area.
Hence the interesting times under NBN as all ISP’s that today that can differentiate with Naked DSL a product BigPond doesn’t even sell and tweaked DSLAM plans like Annex M are then all flogging the same vanilla flavoured product from the NBN Co up against the two biggies BigPond and Telstra who can flog the NBN Plan at cost if they have to, and make their margins in the add ons of the total package like high ARPU wireless teasers.
oops, that should be ‘BigPond and Optus’
Oops covers everything you say, imo…!
the Gillard Government wants to discourage carbon emissions by introducing a tax on carbon of ~$25/t.
if you want to discourage bandwidth (broadband) usage, what do you do? you introduce a $20/Mbit data tax on the NBN tail circuit. same deal. same logic.
Yes Tosh that’s what they should do (shakes head)…
Now tell us with a straight face you don’t have a political agenda!
There isn’t anything political about his comment
Of course there is and the fact you (a Young Lib?) don’t recognise it, simply proves it…
WTF has carbon tax right or wrong got to do with BB?
I await a most intelligent [sic] and colourfully desperate reply, I’m sure!
He was comparing the similarity in the taxing methods of the CVC charge and the carbon tax, both tax’s are designed to reduce consumption artificially
Really…
And you think big polluters being made pay for polluting is the same as reducing broadband consumption…?
Gee only yesterday you FUDsters were all telling us how inconsequential the NBN is to voters, now you are comparing it to the biggest current issue in our country…
Then I suppose you guys do thrive on contradictions don’t you?
Yes, it does come down to the same thing
The result of the carbon tax putting a price on carbon is to make it more expensive to pollute
The result of the CVC is putting a price on download speeds and contention making it more expensive (for ISP’s) to send bandwidth through NBN’s links
The intentions of both those taxes are meaningless, what matters is the end result, and that is to reduce consumption of whatever is being “taxed”.
LOL… keep clutching at straws boy…!
Perhaps you might be able to AGAIN, add a bit of a swipe at Quigley… while you and your clone are in the swing of making up stupid comparisons…?
Sorry, Quidley ;-)
suppose that it was possible for Internode to ignore existing contracts and immediately shunt all of its existing subscribers onto its new pricing structure. average gross margins earned on Internode’s broadband plans would be temporarily higher (while the subscribers remain on the copper-ADSL infrastructure), before slowly deflating back to the previous status quo as Internode’s subscribers are gradually migrated onto the new NBN fibre network with the $20/Mbit tail circuit charge.
this is actually a smart mechanism of dealing with the problem christened by Internode as the “slow walk along the valley of death”. because ADSL subscribers are gradually migrated onto the NBN in small cohorts as the new fibre network is incrementally rolled-out, every ISP operating on the NBN will effectively be a “small ISP” and will initially incur higher than normal “unit CVC costs” due to the transitory inefficiencies in provisioning burst capacity at each POI for small subscriber bases. these higher than normal unit capacity costs will be absorbed by the ISPs to cushion the impact on retail pricing for the new fibre services.
by pre-maturely pricing copper-ADSL subscribers as if they were already on the more expensive fibre network, Internode can use the temporarily higher margins earned on the legacy network to subsidise the slow, painful transition across to the new platform.
The whole article smacks of fanboy-ism which isn’t surprising I guess. Internode were the white-knights of the Australian broadband in the last decade and I guess some people are having a hard time seeing the current reality for what it is and not through rose-coloured glasses tinted by their own idealistic memories.
The fact is Internode is offering you less for your money at a time where many ISPs are somehow offering you more. You can join the article’s writer, Hackett or the Internode fanboys in waving your fists at the Telstra boogy-man and shouting down anyone who speaks out on internet forums or you can wise up and get a better deal for your money. I, for example, made the switch from Internode to Netspeed (local ISP in A.C.T with local techs and local call centre) a three months ago now paying less then what I did with Internode for double the download quota I used to have.
The choice is yours. Frankly though I’d have to question anyone’s faith in an ISP that throws a hissyfit at the customers that ARE loyal to it every time it doesn’t get its way with The ACCC. This is not the first time Internode has done it and I honestly doubt it will be the last.
Seems a lot of ISPs find no problem offering more for less. Increase download quota, drop prices, don’t provision for extra capacity, blame Telstra when things get slow.
My point exactly. Telstra are a cancer on Australian telecommunications but we all know that. Furthermore, plenty of other ISPs are managing to come out with better value for their customers when all Internode can do is raise prices, try to railroad people in to bundling and blame Telstra for pretty much every problem they have.
I think reality is starting to hit home that Internode are simply a business like any other, who are there to maximise their own profits…
I have said before, imo, whilst Telstra’s competitors/wholesale customers were telling us all what monsters Telstra were/are (and they were particularly under Sol) the reality is while ever Telstra kept their prices high, it allowed the likes of Internode to undercut them but still keep their price relatively high, make a very handy profit AND also come out smelling like roses, as they did.
All the more reason imo, why we need to embrace the NBN, taking the network onus from Telstra/privately run businesses simply looking out for themselves/stakeholders. Thus leaving the network government owned (for now anyway) and a level playing field/as level as we will ever get anyway, in retail…!
I guess someone’s not too happy:
http://i43.photobucket.com/albums/e389/62791/hackett.jpg
lol
Hey RDG, dare you to post that link in the Internode forum in Whirlpool, then count the minutes before it is deleted, the moderators will probably use ‘pointless’ as the reason.
:)
I just went and checked, Alain, and was *very* surprised to find it still there:
http://forums.whirlpool.net.au/forum-replies.cfm?t=1736250&p=52#r1024
Yes it is surprising, but I put a herring on it anyway!
(only jokin’)
lol
boy, i just clicked on that WP thread…. Node’s WP fanbois easily swallowed that “Telstra squeeze” bait hook, line and sinker…. the amount of mindless Telstra-bashing on WP is unbelievable.
Well that’s nothing new, it’s always been like that, any utterance from Hackett is treated with the same reverence as Moses coming down the mountain with the Ten Commandants.
As a long time customer of Internode, I’m really surprised that they announced the plan changes while Hackett was away at Questnet 2011 in Queensland. It’s the first time I can remember him not being there to defend/boast plan changes.
There is one major plan change that has really got me puzzled, the Easy Reach ‘special’ which was for 30 gig of ADSL2+ for $29.95 on a Telstra gear bundled with resold PSTN – Nodeline at $29.95.
It was on the market for about a month then withdrawn totally in the latest changes, how come it was viable one month ago now it’s not?
What was the point of the ‘special’ in the first place? – bizarre.
*There is one major plan change that has really got me puzzled, the Easy Reach ‘special’ which was for 30 gig of ADSL2+ for $29.95 on a Telstra gear bundled with resold PSTN – Nodeline at $29.95.*
this is why i believe the latest plan changes have very little to do with a “TW margin squeeze” but is a deliberate effort to reshape Internode’s subscriber base and cost structure. basically, from a (cost) structural point of view, Easy Reach plans should always be more expensive than the other plans using non-Reach DSLAMs.
for the non-Reach plans, Internode has slashed the entry-level quota from 150GB to 30GB. to preserve the relative attractiveness of the Reach and non-Reach plans, they have to do the same for Reach plans. if they had retained that $60 30GB Easy Reach special you talk about, then presumably for the first time ever, you’d have a Reach plan (namely, the $60 30GB special) that was actually on par with non-Reach plans (namely, the Easy Broadband 30, Easy Bundle 30 and Easy Naked 30 which are all priced at $60).
so, instead of TW pricing driving the changes in non-Reach plans, it looks in this particular case you mention like non-Reach plans driving changes in Reach plans. ultimately, all these price hikes and quota reductions are inevitable with the $20/Mbit NBN tail circuit charge. if anything, it’s going to be death by a thousand cuts and this round of plan changes is probably just the first cut.
if i recall correctly, the ISPs have been saying that the median industry plan is something like “$30 phone + $30 50GB broadband”. as a result of the NBN pricing, the price of phone and broadband will go up by $10 each or $20 in total. so, under the NBN, we are looking at $80 for “voice + 50GB broadband”. even after the latest plan changes, $80 buys you 200GB on non-Reach plans. so, we still got a long way to go in terms of rising price/falling quotas (200GB –> 50GB)!
Yes I see, you don’t want Internode customers moving to Telstra Plans if they are just as attractive as plans on your own DSLAM’s in those exchanges you have rolled your own gear into, so it is all about making Telstra plans unattractive, which doesn’t help new/current customers in Zone 1 exchanges with no Internode DSLAM’s that didn’t get in quick and sign up for the limited release Easy Reach ‘special’.
The question I ask of Internode is all those customers that did sign up for the special I assume under the mantra howl of a ‘Telstra price squeeze’ are making a loss for Internode.
I assume the ACCC in any evaluation of Telstra LSS and ULL pricing from ISP complaints will have a look at the Internode Easy Reach bundled $60/mth special and the reason for the release at the time and the reason for its hasty withdrawal only a month later.
actually, if you look at the new Easy Reach pricing structure….
Easy Reach 60 of 60GB costs $50 + $30 phone = $80
(which is close to industry indications of new median pricing under the NBN of $80 for 50GB plus voice)
so, i think the new Easy Reach pricing structure for 5/60/100/250GB is reasonably reflective of how much broadband will cost under the NBN. of course, don’t forget to add $30 phone to Internode’s advertised Easy Reach bundled pricing.
Well it’s early days to be adjusting your ADSL pricing both Telstra and your own DSLAM plans to what the NBN ‘might be’ this far out from substantial numbers even being on NBN infrastructure paying commercial rates, what’s the point?
Until Telstra and Optus customers are on-board in substantial exchange area numbers the present NBN uptake is just a pilot tyre kicker exercise with no statistical meaning.
From what I have read in the Internode cult blog heartland the Internode forum in Whirlpool which is running at 56 pages 1100 replies and read by 16770 since the plan releases only last Tuesday the vast majority are not happy, whether this translates into a exodus to better value ISP’s elsewhere time will tell, but I suspect a hasty modification or two or three maybe being discussed.
hmm… i just took another look at Bigpond’s plan pricing. i’m guessing (at this stage) that they should be able to carry their current retail pricing over to the NBN with only relatively minor adjustments.
the thing is just over half of the 5mln broadband subscribers are non-Bigpond customers. the real (immediate) cost of the NBN vs the present status quo will be the non-Bigpond customers of the likes of TPG, iiNet, Internode, etc being forced to migrate to a pricing structure that will be similar to current Bigpond pricing. (and, of course, NBNco won’t survive financially on subscribers utilising Bigpond-like quotas.)
Gee look…
Those NBN FUDsters/free marketeers who want “private enterprise” to get their mitts on Australia’s comms (in fact they want the taxpayer to pay them subsidies to on OUR network – but the NBN is wasteful…que) are now whinging about the very same private enterprise, doing what private enterprise does…
How ironically delicious!
*Well it’s early days to be adjusting your ADSL pricing both Telstra and your own DSLAM plans to what the NBN ‘might be’ this far out from substantial numbers even being on NBN infrastructure paying commercial rates, what’s the point?*
well, if you assume that the NBN will get built and everyone will have to pay the $20/Mbit tail circuit charge, then:
1/ you don’t want to suddenly overnight hit your subscriber base with higher NBN pricing vs copper-ADSL when you finally migrate them. you want to act in advance to gradually “season” your subscriber base so that you don’t face massive churning or revenue volatility over a short period of time. you want the adjustments to your business model to be incremental, hence, less risky and painful;
2/ temporarily charging your subscribers higher prices even though they haven’t yet been migrated to fibre is a convenient solution to deal with the “walk in the valley of death” problem. read my post here:
http://delimiter.com.au/2011/07/16/reality-check-internode-is-not-price-gouging/#comment-96865
anyway, i’m talking about gradual price/quota adjustments to final NBN “steady-state” pricing – not one big jump to that endgame. Internode’s latest non-TW plan pricing is still nowhere near “$80 for 50GB broadband + voice” industry indication. basically, they will converge towards current Bigpond pricing. and that implies a massive increase in wholesale revenues because over half of broadband subscribers are non-Bigpond customers. (but even that won’t save NBNco because their revenue projections are based on actual growth in data consumed and not an industry-wide contraction towards Bigpond-like quotas.)
*From what I have read in the Internode cult blog heartland the Internode forum in Whirlpool which is running at 56 pages 1100 replies and read by 16770 since the plan releases only last Tuesday the vast majority are not happy, whether this translates into a exodus to better value ISP’s elsewhere time will tell, but I suspect a hasty modification or two or three maybe being discussed.*
i also took a quick look at Optus and iiNet’s plan pricing. my impressions are that Internode’s prior pricing was more generous than the other majors (except TPG which is whoring its network) and their latest plan changes basically brings them closer in line with Optus and iiNet (in particular). bottomline, if they are to lose subscribers, it will be to TPG and the smaller ISPs outside the big 5. and, essentially, they are just losing the “worst leeches”. now, if TPG and the smaller ISPs get flooded with Internode’s leeches, their network costs will go up and either:
1/ they will have to raise prices/restrict quotas closer towards the other majors to maintain network performance, or
2/ the defectors from Internode will find the service at TPG & Co. increasingly crappy they will end up returning to Internode or the other majors anyway.
@ToshP300
“hmm… i just took another look at Bigpond’s plan pricing. i’m guessing (at this stage) that they should be able to carry their current retail pricing over to the NBN with only relatively minor adjustments.”
I am sure they can, the risk ISP’s run is that when the NBN hits a exchange area at some point a residence will receive a letter from the NBN Co saying they have xx days to pick a NBN Plan with their ISP of choice before the copper/HFC is shutdown.
Now you would think most residences would stick with the ISP they had ADSL/ HFC cable with, hence your assertion that Internode is aligning their ADSL plans with their NBN plans, you don’t want the customer thinking about it too long, they might move.
“It’s virtually the same plan on the NBN, I might a well stay, it’s less hassle” attitude.
The risk you run is losing customers because you ‘over did’ the aligning too far out from the bulk migrations that really matter much later on from mid 2011 in the NBN rollout schedule across Australia..
*The risk you run is losing customers because you ‘over did’ the aligning too far out from the bulk migrations that really matter much later on from mid 2011 in the NBN rollout schedule across Australia..*
okay, okay….
two points:
1/ Internode’s latest non-TW plan pricing is still nowhere near where they have to be to be viable under the NBN. a simple way of seeing this is to compare Easy Reach pricing with non-Easy Reach pricing. there’s still a massive gap. something like “30GB vs 5GB”, “200GB vs 60GB”, “300GB vs 100GB” and “1TB vs 250GB” across the different price points. like i said, death by a thousand cuts. we just saw the first cut.
2/ Internode’s previous pricing was actually very generous relative to Optus and iiNet. out of the 5 majors, their previous offering was only inferior to TPG (which is just a crazy outlier for a major ISP and an extreme business model). yes, it’s true they have narrowed the “relative value gap” between themselves and Telstra, Optus and iiNet. but for an “Internode leech”, if they are to migrate to a different ISP for bigger quotas, it would have to be either TPG or the smaller ISPs outside the big 5.
3/ the subscribers that Internode faces most risk of losing are the “worst leeches”. their cost structure will actually improve (higher margins) by getting rid of these leeches.
4/ the subscribers that Internode’s competitors will most likely attract are Internode’s “worst leeches”. their cost structure will worsen meaning that they will have to raise prices or lower quotas relative to previous status quo.
5/ hence, the net result is that Internode’s competitors will be forced to adjust their plan pricing closer towards Internode, Optus, Telstra and iiNet. this will limit the risk of Internode losing too many customers that you highlight.
@tosh P300
The other interesting point to be made about the Internode changes is the $20 discount (up from $10) to your BB Plan if you bundle Nodeline the Telstra resold PSTN.
Internode obviously want to make it very hard for you not to take Nodeline, which on the surface is strange as it is just a straight Telstra Wholesale PSTN resell, why give more revenue to the supplier you love to hate?
I assume they want to lock you into a total service from them, none of this Telstra Homeline Budget mix coupled with the choice of a Internode BB plan, those customers in the near future might waiver from Internode because they are half way to qualifying for a BigPond package which to get the deepest discounts requires you to have multiple products with Telstra.
The all in package with calls included even to mobiles is being heavily marketed by Optus under their Fusion banner as well, but I think Internode need to sharpen up their Nodeline offering, like introducing capped national call rates like iiNet does with its PSTN product to compete successfully in that area.
aside from possible minor adjustments to their most expensive plan, Telstra can basically sit pretty on their current Bigpond pricing and coast onto the new fibre platform with their current clutch of subscribers and watch their competitors slaughter each other as industry pricing converges higher towards Bigpond.
interestingly, this also means that all those second-tier providers who offer congested services which rely solely on TW have some chance of surviving after some pricing adjustments. those second-tier, rubbish network providers relying on LSS-based wholesale ADSL services will get creamed altogether.
actually, it would be fun if Labor won the next election, the NBN was actually built to completion and watch the massacre unfold…. lol.
@alain
*The other interesting point to be made about the Internode changes is the $20 discount (up from $10) to your BB Plan if you bundle Nodeline the Telstra resold PSTN.*
well, that’s just the nail in the coffin to the “wholesale margin squeeze” excuse for completely overhauling their plans. one new feature of the NBN is that voice will always be bundled with broadband, as opposed to the current regime where you can either have “voice only” (WLR) or “voice plus broadband” (WLR + LSS). this explains:
1/ the bundling of VoIP with naked plans;
2/ the narrowing of the price difference between “bundled” (bb + phone) and “unbundled” (bb only) from $20 to $10 (i.e. the saving from “unbundling” phone is now only $10 compared to previous $20).
all the plans are converging in terms of quota and prices:
1/ the quota tiers across Easy Broadband, Easy Bundle and Easy Naked are now exactly the same. the 1TB plan will probably eventually get dropped as we get closer to fibre migration;
2/ the bundled pricing tiers (after adding in $29.95 NodeLine for Easy BB and Easy Reach) are IDENTICAL across ALL plans – the only exception is the entry-level Easy Reach which is $10 higher at $70.
3/ as mentioned, the unbundled prices for Easy Broadband and Easy Reach have been pushed higher to within $10 of the bundled price points.
the likely final end game upon transition to the NBN will be:
1/ the “NodeLine unbundling” saving will vanish altogether ($20 –> $10 —> $0);
2/ the entry-level price point will be harmonised at Easy Reach’s $70, resulting in a final price scale along the lines of $70 / $80 / $100 / $150;
3/ the quotas on the non-TW plans will plummet towards the Easy Reach levels;
basically, with the disappearance of WLR, ULL, LSS, etc, Internode’s various plans will collapse into a single plan closely resembling their present Easy Reach offering.
essentially, the median consumer spend on broadband of $30 phone + $30 broadband or $60 in total is unchanged. that $60 mark or “comfort zone” will still be the “centre of gravity” for broadband pricing. but, due to the $20/Mbit NBN tail circuit charge, the same $60 spent on the NBN fibre network will give you less in quota.
whoops… i meant that $60 “centre of gravity” just became $80, and $80 on the Bigpond pricing scale buys you much less quota than on non-Bigpond broadband plans.
Don’t worry Tosh, no one noticed nor cared about your little faux pas above, because frankly, there’s only alain and me who bother reading your biased waffle any more.
And I only read for sh!ts and giggles…
As I said to your mate, “whoops” pretty well covers all of your comments, imo…!
@alain
looking back with hindsight, it’s interesting to note that Bigpond adjusted its midpoint plan pricing to $79.95 unbundled for 50GB broadband a couple of months before the release of NBNco’s 3 year Corporate Plan. once you factor in the $20 Bigpond Member Benefit from bundling phone and 24mth contract lock-in, you’re looking at $80/mth for “phone & 50GB broadband’.
now, when Telstra was negotiating the $11bln deal with NBNco to shutdown their copper network, they would have been concerned about protecting the total “franchise value” of their fixed-line network, in terms of both “wholesale margins” and “retail margins”. since Telstra is destined to remain as a retail provider on the new fibre platform, logically, the Telstra/NBNco deal need only compensate them for the loss of “wholesale margins”.
at this point, it’s important to realise that the demarcation between “wholesale” and “retail” for a vertically-integrated company is pretty much arbitary (as Telstra do not pay themselves to access their own network – should they chose not to wholesale their network, “wholesale prices” would not even exist!). however, how NBNco compensates Telstra for the loss of “wholesale margins” (in terms of imputing a “wholesale price” for the incumbent’s current operations) also determines the future “retail margins” Telstra needs to earn on the fibre platform to ensure neutrality in terms of the “franchise value” of their fixed-line operations.
in other words, prior to agreeing to abandon their wholesale business and signing the $11bln deal with NBNco, Telstra would have sought assurances or firm indications of future wholesale fibre pricing. essentially, Telstra needs to feel secure that their current retail position (in terms of pricing, profitability and market share) will remain unchanged (or, at least, no worse off) following the migration to fibre. if Telstra felt that their retail position would be threatened (e.g. reduced margins, shrinking market share, etc) under the new NBN regime, they would have insisted that immediate compensation be included as part of the $11bln deal.
hence, wholesale fibre pricing was always an implicit part of the commercial negotiations between Telstra and NBNco. Telstra already had some idea of the wholesale fibre pricing schedules, including the level of the CVC charge, prior to the public release of NBNco’s 3 year Corporate Plan. so, it most likely wasn’t a pure coincidence that the subsequent divulgence of the AVC and CVC tariff schedules saw industry estimates of the new “centre of gravity” in median pricing of “50GB broadband plus voice” rise from approx. $60/mth (under copper-ADSL) to approx. $80/mth (i.e. Bigpond’s current pricing “centre of gravity”) under the new fibre regime.
it’s hardly surprising that a massive transformation or overhaul of the telco sector would have to revolve around protecting the “franchise value” of the incumbent which draws in a huge chunk of total industry revenue. in other words, it’s perfectly logical for industry pricing to converge towards Bigpond’s pricing structure following the migration to fibre, as minimising the disruption to Telstra’s retail position (in terms of pricing points, margins and market share), ultimately, also minimises the total compensation needed to be paid to the incumbent to facilitate the overhaul.*
hence, i suspect that the success of the $11bln deal is conditioned upon not just the ACCC’s approval of the structural aspects of the sectoral transformation (in terms of removing the vertically-integrated player) but also the proposed wholesale fibre pricing schedules. so, in terms of the success of the $11bln deal, both issues are not separate matters for consideration for the ACCC. in this respect, there are two points worth noting:
1/ the $20/Mbit tail circuit charge would possibly have been set higher in the absence of a need to accomodate Bigpond’s current retail pricing points;
2/ given that the ACCC is primarily concerned about “consumer outcomes”, any proposed adjustment to the tail circuit data charge by the regulator would likely be “lower”. this may not necessarily hurt Telstra’s retail profitability over the long-run but would result in significant, short-term disruption to their current market positioning. more importantly, it would likely cause NBNco to withdraw from the deal (or seek an adjustment) as their calculations of the $11bln compensation package are, presumably, closely formulated around the proposed levels of wholesale fibre pricing.
* in any event, due to the higher capital base of the new fibre network relative to the old copper network, current Telstra Wholesale pricing was, at best, always going to act as a lower bound constraint on future wholesale fibre pricing.
@alain
*Well it’s early days to be adjusting your ADSL pricing both Telstra and your own DSLAM plans to what the NBN ‘might be’ this far out from substantial numbers even being on NBN infrastructure paying commercial rates, what’s the point?*
there’s also another good reason to re-price your subscriber base now. if you were looking to sell or merge your business with another ISP, it’s easier for third parties to evaluate the value of your subscriber base and revenue streams if the current pricing is closer to what it will have to be to remain viable under the NBN.
for example, take TPG – their pricing models are so extreme and so far away from TW/Bigpond pricing that it’s hard for an investor to know what will happen to their subscriber base and earnings if their pricing was brought in line under the NBN. anyone interested in acquiring a stake in TPG’s business (including selling out to them for a small equity stake) would discount the current value of their franchise.
@alain
also, currently Bigpond’s cheapest bundled plan is $60 for 2GB. there’re probably a lot of subscribers currently looking to competing ISPs for better value, e.g. $60 for 30GB at Internode or $60 for 20GB at iiNet, etc
once these ISPs are forced to price like Bigpond, many of their light user customers will switch completely to wireless. because the industry’s new pricing “centre of gravity” has gone up from $60 to $80 for 50GB, the ISPs can’t afford to be too generous with quotas for the entry-level price point of $60/$70 or they won’t get their required $80 median.
this is the real killer for NBNco as it will push a lot of light users off fixed-line broadband completely. look at Internode’s current Easy Reach 5 plan – who will pay $70 for 5GB + phone in the future?
@ Tosh and alain…
And both of you are really great character witnesses, looking at the unbiased [sic] comment you post in relation to the NBN… sigh!
I am quite enjoying their discussion. At least they have something to say unlike your trolling.
Well good for you… Daz!
Noones mentioned iPrimus plans.
I’ve been with them for years – they have heaps of plan options – they offer plans across their network, Optus Wholesale and Telstra wholesale – all at better prices and allowances than internode. AND their call centres are all in Melbourne.
Am I missing something?
I call bullshit.
Microsoft, iTunes, and Sony software/updates/media are all mirrored on akamai servers. Akamai has local peering with all of the major carriers in Australia i.e. Telstra, Optus, AAPT, and would definitely have it with Internode (considering Hacketts claim that his company are one of the biggest international Wholesale IP purchases) and iiNet.
Now people guess how much a akamai peering connection is a month. $500 or even $1m? Nup, its $2k a month.
Now considering that huge amounts of our traffic are to and from these company’s and then divide $2k by the total amount of traffic per month that would be passing that connection you then have an underlying cost per MB (and a very rough one at that). We are talking about $0.000001 of a centre.
I remember years ago, we had a customer with a $50k usage bill. Looping of an update/patch. When to the Product Analyst and asked them to tell me the cost (COGs) of that usage. He told me that he couldn’t because it would be too disgusting. I said, well what’s the ball park. He said it was well under $50.
I’m sick to death that likes of ISPs can complain about pricing pressures when in reality the cost of wholesale IP has been dropping insanely. One carrier I worked at explained that compared to this time last year, they had to sell ten times as much wholesale internet access to simply maintain profitability at that the same level.
I’ve seen major carriage service provider contracts reduce 50% from an already awesome rate.
And then they have the gall to sell that bandwidth at thousands percent mark up and cry about pricing pressures. Call centre staff are earning the same they did 3 years ago (I know because they all got told the GFC was why they didn’t get a pay increase). We’re talking about $40-50k a year (if your lucky).
No the real pricing pressures in the Telco industry are the bloated wages paid to executives, senior engineers, architects, and managers.
The billing architect at NBN is on 7 figure package for godsake!!! Its not unsurpising to find middle management on $150k plus. I visited one carrier. Parking in their CBD building, where a well known acocunting firm is I was shocked to find more porsches, audis etc in their parking lot compared to the accounting firm.
Lastly re traffic, for the traffic that stays within Australia there is no bloody reason why it should be chargeable. Intra-VRF traffic costs nothin to deliver. With the huge overbuilds in capital cities (not to mention the fact utilities have been laying 1-10gbps fibre loops on their control circuits) there is so much bandwidth in australia is not funny.
All of this tyranny of distance crap is just code word for price gouging. For 90% of the population who live in Urban centres we simply are being held hostage to an industry that is shovin cash into its own pockets faster then you can say “global financial crises”.
Node have really dropped the ball here. Not enough choice in their plans now.
Disappointing but here is Tassie we have 3 choices. Telstra Netspace(iinet) or Internode equipment, anything else is Wholesale Telstra.
Just have to wait til the NBN is rolled out in real areas in Tassie.
The Easy Boradband Businesss – 30 gig now $79.00 was $39.00 unbundled seems like an absolute gouge to me.
Been with Internode many many years this is what makes one mad, if I am forced to change an face a cost increase this large, I will examine my options. More than 100% increase does not wash with anyone………..
I do not agree with everything in the article:
1) It seems to make the point a number of times that the Telstra plans are the only ones that are getting slugged – NOT true. I am on the now “grandfathered” Easy Naked S – 150GB, $59.95 per month on Optus DLSAM (Agile not avaliable on my exchange). Yet this plan is now gone, why ?? It is NOT a plan avaliable on Telstra DSLAM.
2) This article:
“Now, the only place where Internode’s plans really fall down are when it comes to plans on Telstra’s infrastructure. $139.95 for a 250GB plan with a telephone line? $89.95 for a 100GB plan? That’s just plain ridiculous … and we wouldn’t recommend paying these prices if you can escape them by signing up to an Internode plan which uses the ISP’s own infrastructure — or even that of Optus.”
….and Paying $59.95 for 30GB per month for a Naked DSL plan on Optus or Agile DSLAMS ISN’T ridiculous ????
3) I do how-ever agree that Hackett is one of the few very active MD’s on whirlpool and has, on alot of occasions been very willing to help out users with difficult problems. Very rare to see that these days.
I really hope that Internode do not force users of what are now grandfathered plans as I will leave. I cannot afford their new Naked plans (30GB for $59.95 or 200GB for $79.95), sorry I need more than 30GB per month and I cannot afford an extra $20 per month for an extra 50GB.
Internode are one of the few really good ISPs, but in this day and age where every $$ counts, sometimes sacrificing good/reliable service in favour of keeping the monthly bill down is a necessity.
/end rant.
Hang on Robert,
You say:
in this day and age where every $$ counts, sometimes sacrificing good/reliable service in favour of keeping the monthly bill down is a necessity.
Wouldn’t that also apply to Internode? Don’t you think that perhaps they are doing this exactly because they gotta keep THEIR bills down as a necessity?
Just sayin’
if they were doing that, 1/ they wouldn’t raise prices and 2/ they’d simply save money by purchasing less capacity and oversubscribing their network like TPG.
Until Internode start selling 38mbps or 108mbps services, they will continue to be largely irrelevant compared to cable providers offering a far superior service at similar or better prices.
@ToshP300
Starting new, the nesting is getting too deep. :)
Following on from your last post it is interesting to read about Telstra Wholesale’s first steps into becoming a NBN wholesaler.
“06 July 2011 – Telstra Wholesale and M2 Telecommunications Group connected the
first M2 customer to NBN Co’s fibre network at Armidale in NSW yesterday, heralding a
new era in wholesale aggregation in the Australian telecommunications industry.”
“Telstra Wholesale is the first provider in the market providing
products and services over the NBN that can be re-sold to consumers.”
http://telstrawholesale.com/newsevents/docs/TW_M2_NBN.pdf
It shows the initial approach Telstra are going with the NBN, I think they are more than happy to establish their credentials as a NBN wholesale reseller to their many clients rather than any haste in getting a few select BigPond customers on the NBN in pilot areas.
Other Telstra Wholesaler resellers seem to be very happy that Telstra will selling NBN as a complete package to them.
http://www.crn.com.au/News/216070,telstra-wholesale-partners-charmed-by-nbn-deal.aspx
Of course the delicious irony of all of this is that Telstra Wholesale under the NBN might become even bigger than they were when they owned their own infrastructure, and the bonus is they don’t have to pay for it and wear the massively indecent CAPEX and flakey ROI risk!
:)
well, your competitiveness as a wholesaler hinges on your ability to offer aggregation benefits (scale):
1/ Telstra has just under half of all retail broadband subscribers
2/ industry retail pricing will converge towards Bigpond
3/ Telstra is best positioned to bundle products (3G, LTE, Foxtel, etc)
putting 1 + 2 + 3 together = end of story.
Whats all this opinion in the article about complexity of plans from Internode? Maybe in the good old days, but they have simplified it down to just 11 different options now. IInet have 11 plan types too, and they can on-sell Telstra wholesale at much cheaper rates than Internode with more data caps. Maybe there is some loss there, but thats what other parts of the business is for. Not every single part needs to generate profit. Look at support?
I’ve been with Internode for nearly 10 years, when there was 30 different plans, but these days the level of service, plan options, and pricing has forced me to to move on. Especially because I dont have the luxury of being on an Internode DSLAM, but even then the plans are simplified / limited. The now grandfathered reach plans were already expensive, but there is no reason to continue to pay the premium, and hope that they wont turn off the free newsgroups / force you to plan change.
It seems that TPG is not being squeezed by Telstra:
http://forums.whirlpool.net.au/forum-replies.cfm?t=1736250&p=63#r1241
No they are just squeezing other ISP’s.
:)
@alain/deetego
when NBN wholesale fibre pricing was first announced, some people remarked that the CVC charge was just mirroring TW’s AVGC charges. in retrospect, they were completely correct. all NBNco’s wholesale pricing does is to force the whole industry to adopt the TW cost structure.*
TW’s schedule of tariffs are essentially set to make it difficult for Telstra’s competitors to undercut Bigpond’s retail pricing structure. of course, the competing ISPs have been able to circumvent this and offer much more attractive broadband plans by:
1/ using a mixture of TW and non-TW DSLAMs (thereby, lowering their average cost structure);
2/ offering a more contended network than Bigpond.
under the new NBN regime, LSS, ULL and equivalent services will no longer exist and Telstra’s competitors will be forced to adopt a “100% TW” cost structure. naturally, this means that the current retail offerings of the major competing ISPs will necessarily converge (higher in cost) towards Bigpond’s broadband plan pricing.
this is why the industry is predicting that “unlimited” (and other large quota) plans will disappear under the NBN. they will simply be too expensive to provision using NBN/TW pricing. this is obvious to see as “unlimited” or 1TB plans are currently mostly (if, not all) offered only on non-TW DSLAM infrastructure. Internode’s highest quota plan using Easy Reach (or TW DSLAMs) is merely 250GB. the current median industry price point of $60/mth for “50GB broadband & phone” will also gravitate higher towards Bigpond’s $80/mth for the same package.**
essentially, to earn back the $50bln investment in the new fibre network, NBNco is projecting that broadband subscribers will spend substantially more on services over time. they are forecasting wholesale ARPU of $30-35/mth during the early years of the fibre roll-out which rises to a long-term, steady-state of $70-80/mth. this means that they are expecting the “economic” transition over to the new fibre platform to happen over, broadly, two stages:
1/ “the involuntary stage” – initially, as ADSL subscribers are migrated over to the NBN platform, industry pricing of broadband will converge higher towards Bigpond’s current retail price points due to the imposition of AVC and CVC charges. given that Telstra has just under half of all retail broadband subscribers, ~50% of ADSL subscribers should be unaffected by this initial transition.
furthermore, subscribers on competing ISPs’ TW DSLAMs should also be minimally affected given the closeness in Bigpond retail pricing and TW pricing. however, subscribers on non-TW DSLAMs (which rely on “soon-to-be-extinct” LSS and ULL access) will, in pricing terms, effectively be “forced onto TW DSLAMs”. the net result of this will be an overall contraction in data consumed by retail broadband subscribers due to the higher wholesale cost of accessing the tail circuit (following the demise of DSLAM competition) – total wholesale revenues should remain roughly unchanged (due to the partially offsetting impact of higher price vs lower quantities).***
2/ “the voluntary stage” – over the next two decades, NBNco expects industry pricing of the median broadband package to rise from $80/mth for “50GB broadband & voice” to a substantially higher price point, as consumers “voluntarily” spend more money on fixed-line services. their various projections basically revolve around the following key assumptions about the future “median consumer”:
i/ wholesale ARPU of $70-80/mth;
ii/ average data consumed of ~600GB at a CVC price of ~$9/Mbit.
to generate that required ARPU, they are essentially projecting that ISPs will provision the median broadband subscriber with around 5Mbits of constant peak hour capacity**** (say, the equivalent of a single HD video stream). the implied CVC cost per subscriber is approximately $45/mth – combining this with a median port speed of 50-100Mbit results in total wholesale ARPU within their estimated ballpark.
however, if, initially, wholesale ARPU of $30-35/mth correlates with industry pricing of $80/mth for the median “broadband & voice” package, then wholesale ARPU of $70-80/mth implies a future median retail price point of as high as $150/mth.***** more importantly, being as it is, a “median” retail price point, this implies that:
1/ for the “median” price point of $150/mth (say) to “hold”, there must be a significant chunk of fibre subscribers outlaying even larger amounts on more expensive packages at higher price points (say, +$300/mth);
2/ these premium subscribers are effectively subsidising network users on lower (below median) price points (say, $100/mth);
3/ the real constraint on NBNco setting a lower CVC price, or ISPs offering a better product (in terms of higher constant peak hour bandwidth) at the median price point is “baseline” consumer demand. suppose that there are three price points:
i/ low – 2.5Mbits (e.g. sufficient for a low quality video stream);
ii/ median – 5Mbits (e.g. sufficient for a single HD video stream);
iii/ high – 10Mbits (e.g. sufficient for two HD video streams)
now, should the lowest, median and highest price points be provisioned with 5, 10 and 20Mbits of constant peak hour capacity instead:
i/ it will make no difference to NBNco’s operating costs;
ii/ however, the primary obstacle to this happening will be the risk that the average retail subscriber will drop down one price point, thereby, unbalancing the overall (required) subscriber mix and reducing average margins (below target) for both NBNco and the ISPs operating on the fibre platform.******
* this is actually intuitive once you realise that:
1/ the higher capital base of the new fibre network relative to the old copper network;
2/ the commercial imperative to protect Telstra’s retail broadband pricing structure and market positioning
imply that TW (copper) pricing would always act as, both, lower and upper bound constraints on NBN wholesale (fibre) pricing.
** for Telstra’s competitors, the intuitive logic behind this is that they will need to earn higher margins on the low to mid-range plans to offset the loss of margin or volume on the high range plans (500GB/600GB/1TB) they currently offer.
*** there’s even the real possibility that the number fixed-line broadband subscribers will decline. essentially, the growth in the broadband market over the past decade has been underwritten by rising uptake of LSS/ULL access, which lowered the average cost structure of broadband provision through DSLAM competition. the effective reversal of these cost gains which NBN wholesale pricing implies and the consequent elimination of (quality) “cheap plans” may well accelerate the rate of fixed-line disconnections.
for example, prior to the latest plan changes, Internode’s entry-level “Easy Broadband” plan used to offer 150GB bundled broadband for $60/mth. the entry-level quota has since been bumped down to 30GB. this may still offer value to the “light user demographic” relative to wireless offerings. however, if the entry-level quota on this plan (which is provided on Internode’s own DSLAMs) is harmonized with the entry-level quota on Reach plans (5GB), many light users may well abandon fixed-line broadband for wireless (especially as wireless offerings become more attractive over time).
**** there’s no point in building a superfast fibre network only to consume 600GB at a constant rate of 2Mbit over the course of a month – you can do this on copper-ADSL! hence, value generation under the NBN is tied to the provisioning of constant peak hour capacity (e.g. for real-time, peak hour entertainment) as opposed to the raw quantities of data transferred across the tail circuit.
***** the implied retail margins no longer appear that large once you factor in “content costs”, or other costs of accessing (or developing) the sort of digital applications that would justify spending $70-80/mth at the wholesale level on superfast broadband.
****** in any event, this is largely academic as, commonsense dictates, the retail broadband market will never sustain the nominal levels of spending required to keep the NBN financially afloat.
From a retail domestic user’s POV , what’s the point of high speed fibre broadband with low quota? Won’t people burn through their quotas quite early in the month?
One of the reason’s copper line broadband usage increased is because the overall Internet quantity increased – HD YouTube and so on – and will keep increasing I should imagine as Netflix and similar companies open up entertainment data requirements.
(I hope that makes Merlot sense,. ;) )
*From a retail domestic user’s POV , what’s the point of high speed fibre broadband with low quota? Won’t people burn through their quotas quite early in the month?*
well, the thing is wholesale access to NBN fibre is not directly priced according to how much data you download over the course of a month. instead, you’re charged according to the “size of the pipe reserved for use”.
say, you want to move 100 container loads of goods from point A to point B using trucks on a 16-lane highway.
i/ firstly, you must decide beforehand, what’s the maximum # of lanes you can simultaneously use to send your trucks down. you pay a fixed charge according to the max limit.
ii/ secondly, you have to pay a variable charge depending on many “lanes” you want to reserve to send your trucks down.
under the NBN, i/ is the AVC charge and ii/ is the CVC charge. the AVC charge is paid by every trucking company or user. the CVC charge is shared between trucking companies.
And your way…
All the trucks are travelling down single lane dirt roads anyway ;-)
Thanks for that.
Huh TPG rotten sevice to the core useless tech support, slow speeds and always the users ends fault where the fault lays is at TPG.
Some of you need to get actual lives instead of bitching about ISP’s.
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