 rolandeCertifiablePremium,Mod
join:2002-05-24
Columbus, OH
Linksys
AT&T Midwest
| reply to Kearnstd
Re: You smell that? Juniper wins many of the carrier deals these days because they can be competitive on price. But you also have Marconi/FORE Systems, Force 10 networks, Nortel, Alcatel, Lucent, Riverstone, Tellabs, Laurel Networks, and Redback. There are a lot of price competitive carrier class routing solutions out there today. Cisco has by no means cornered this market at all.
In any case, though, the cost of hardware must be capitalized by the telcos and it is still a big hit on their bottom line depending on how many years they depreciate the gear. If they don't charge the subscriber base enough, there is not enough left over in the end for the future investments required to scale the network to meet the growing demands. Business models that do not price higher than the base "supplier" costs in a commodity market may win all the customers up front but will have nothing to show for it in the end.
Providers are either going to have to start taking a more conservative price approach for the tiered "unlimited" bandwidth model or they will have to stop the all you can eat price plans altogether. Something will have to give. In general, consumers are extremely fickle and will go for the best price in a commodity market like broadband. As each provider's average network performance gets worse over time, customers will jump to the best price/performance combo. Unfortunately, the consumer will still pay for this situation in one way or another. The prices will eventually move back upwards when consumers realize "they get what they pay for". 
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Ignorance is temporary...stupidity lasts forever! |
