Survey: Broadband customers want pricing based on usage
- 17 June, 2010 12:24
- Comments 3
Broadband customers want pricing based on speed and what is being used, according to a new survey.
Previously, ADSL infrastructure has limited the ability for ISPs to differentiate pricing based on super-fast broadband speeds.
Compare Broadband, recently conducted a poll asking customers if they would prefer to pay for broadband according to speed and what was being consumed. Seventy-nine per cent indicated that was their preferred method of paying for broadband; 13 per cent indicated they would want to be charged by speed and what they’re told they can use in the form of a download quota; 8 per cent indicated, they didn’t know. About 880 people took part in the comparison site’s survey.
Compare Broadband general manager, Scott Kennedy, said broadband was becoming more of a commodity and people want to consume it in the same way they consume electricity.
“People want to pay for only what they consume rather than be given a quota and working within it,” Kennedy said.
“We get a lot of calls from people saying that two weeks into the month, they’re starting to get slowed down, and they don’t want that. But at the same time it’s a useful mechanism for ISPs to control bad debt as well. People that are in control of their usage, generally only want to pay for what they use.”
Infrastructure issues in Australia makes it difficult for ISPs to price customers based on speed, but the NBN roll-out in Tasmania could help provide that choice.
Kennedy said there hadn’t been opportunities for ISPs to differentiate products sufficiently enough to have different pricing structures.
“In not sure whether that doesn’t work for ISPs because it could create complications with billing, but if an electricity company can do it and they’re measuring how much we consume, we should be able to charge like that too,” he said.
Exetel was an example of an ISP that was charging customers per gigabyte used with a minimum monthly subscription fee added onto the 50mbps and 100mbps plans. But its 25mbps plan has no such monthly fee and customers can receive a speed faster than ADSL2+ and only be charged at $2 per gigabyte. For example, if a customer used 5GB the monthly cost would be $10.
Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.
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Comments
Tony
...and at $2/GB, how can anyone accept that as a reasonable means of usage payment? Seriously now, you pay $50/mth for TPG's 130GB plan which by Exetel's offering would equate to $260.
A user pays system isn't a bad idea if executed well. It's just that at $2/GB when websites and becoming more multimedia rich (and therefore, more data intensive) is definitely exorbitant under the circumstances.
Brad
how about 500 gig for 25.00 pm for cable broadband
Col
Usage based pricing is beneficial for people who don't download much or have erratic download periods where one month they don't download much and hence get a 'saving'. Exetel's TasNBN plans are best suited for people whose average monthly downloads equate to 15GB or less.
When they start offering plans for the mainland's NBN it will be more competitive. Take Opticomm-based plans for example. Compare Internode's standard plans to Exetel's usage based plans and tell me that Exetel isn't competitive... especially towards the lower quotas that Internode offers. With Exetel you only pay for what you use.
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