Saint Louis, MO
reply to espaeth
Re: Next round of web-hog ads in the works espaeth
That does not make sense. If you assume that thier numbers are correct and 95% of their customers use less than 5gb/month then they will take a huge loss by charging them less than they are now. Lets assume they have a hundred customers:
$30x100=$3000 (right now)
$25x95=$2375(less than 5gb)
$2375+$400=$2775(new 5gb +40gb)
$2775 is less than $3000 so they would show a net loss. They will almost have to charge the same amount as they are now for the base package, just to break even on the deal. This also does not take into account the huge amount of overhead that will come about in tracking/billing the bandwidth.
Most people sign up for a higher level of service than what they really need. Not everyone is going to gravitate to the 5GB intro plan, most people will likely opt to stay price consistent with what they already pay and go with a middle tier plan. Some will downgrade to a cheaper plan, most will stay with a middle tier plan, and they can make up quite a big of ground no the top tier + overages.
Saint Louis, MO
Get real, very few people are going to pay $1.00/GB overages for any length of time.
With how hard they are pushing 95% use less than 2GB, and 5GB being the cheapest plan I bet the VAST majority of those users will drop back to the $25 plan. Two and a half times your bandwidth use will be more than enough overhead for these people. Just think about cell phones. People do not get a plan with 2-1/2 the number of minute they use.
The other thing you (and the cable companies) are forgetting is that hard times are at the door. People are scared and will be trying to save money wherever they can ($5 is $5).