Via the tidbits newsgroup an Aussie (amacbell) succinctly points out the problem with Telco pricing:
I know of no other industry where you need to prepurchase on the basis of a best guestimate of the volume of units required for the month ahead.
If you guess wrong and don’t use all the units you bought then you lose your money. Tough.
Can you imagine the uproar that would ensue if petrol stations started selling fuel for your car ‘on a plan’. You would need to prepurchase say 150 litres a month, and if you use less you still have to pay the full price.
Let’s repeat that.
If you buy 100 minutes and use 50, then you have overpaid – by 50%.
If you buy 100 minutes and use 500 then you will be billed at the much higher 100 minute rate.
Either way you have overpaid.
Some telcos will even charge penal rates. (Telecom’s XT price plan does not – well done)
So let’s use Telecom’s XT network’s pricing plan, which is a big improvement, to look at how we can get better.
Right now you need to select a plan based on your guestimate of what you will do.
But why not have one rate – and provide discounts for use based on what I actually use that month? Why not offer the ‘best price’ each month.
So if one month I use 500 minutes I pay 30 cents a minute, and the next month when I use just 30 minutes I pay 60 cents a call. Make it the same deal for everyone, and that way we don’t have to think – and not making your customers think is a great way to sell them more stuff.
Same with SMS – XT’s rates vary from 20 cents on prepay, and 4 cents to 1.2 cents on contract, but you need to predict what you will do. Why not just charge at the best rate for the use that month?
Let’s turn to the real problem – data. Oh data.
Data ranges on XT’s pricing scheme from $300 per GB to $75 per GB. These are insane compared with regular broadband – and I mean it’s insane.
Meanwhile I have no idea how much data I use via XT’s network (I don’t see any warning texts – should I?), which makes this next bit scary.
The penalty rates for going over your data limit are criminal, and I use that word with purpose. There isn’t anyone that would deliberately go over their data limit (or extended data limit) and choose to pay, wait for it, $1,000 per gigabyte of data.
Go check – it’s on that same XT pricing plan, though they quote in megabytes. Megabytes – remember them? They were big back in the days of black floppy disks in 1995, but trivial in the days of 16 GB thumb drives and memory sticks, 5 Mb photos and a >1 Mb Stuff.co.nz home page.
Please Telecom (and Vodafone), and I say this with urgency – please fix your data rates so that using data is fun and not liable to end in penury.
There is plenty of room for improvement. Are you out there 2degrees?