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xsiddalx
join:2005-03-11
Chicago, IL
 ·AT&T Yahoo
·AT&T DSL Service
| reply to fiberguy
Re: Nasty
said by fiberguy  :On one level, customers were offer shopping one provider over the other and would jump ship every other month because of a sale. There are several factors that play into this.. one was that it costs a lot of money to gain a customer up front. It also takes them about 6 months to start breaking even on them... second, to churn a customer, it costs money that they don't make back... so yes, the contract comes to play. Using this argument, I gather you wouldn't find it offensive to walk into any store that has advertised to gain a customer to pay a "contract" to purchase something from them. Who says McDonalds doesn't spend a heaping amount of money to gain/maintain customers? Should they begin charging a minimum term of use? Customers certainly churn regularly depending on mood, food desire, location, ease of access (lines/travel distance). Perhaps we do not have enough competition? None of the competitive business can get that guarantee, can they? 6 months to break even would be a non issue if the service was excellent, or "good enough". It ain't like customers are seeing discounts for multi-year commits, unlike in other businesses.
said by fiberguy :If customers continued to go with the hot deal, and we know that mentality is alive and well here on this site alone, then prices would in fact sky rocket for us all. Thus, the contract. Yeah! This is why Walmart is such a friggin giant, yet doesn't really dominate the overall retail market. They are HUGE but they have yet to monopolize any but the smallest of markets (rural, if you will). Walmart sucks money out of the suburban market and passes on to the rural market, at the same time, sucking more out of the vendors that deal with them. Are there any markets that Walmart has no competition?
Does ANY mass market competitive business, other than cable and telecom, require multi-year contracts? Perhaps the mass market contracts are indicative that this isn't the competitive market it should/could be.
said by fiberguy :Think about when the contract came.. When it was just the A/B systems, contracts started to come to play, BUT, they were pro-rated contracts. (ie: if you were in a 1 year, were 6 months through, the break out was $100, then you paid $50 to get out) Now that there are several carriers, they did away with that. Too many companies in the field make it even costlier for the carriers. (not making an excuse, just saying it like it is) This made sense when the business was new and fairly dominated by the LECs and was priced at a buck a minute.
This also made sense when competition was created and everyone was seeking out market share at any cost.
This only currently makes sense because the carriers themselves will only allow devices they approve on their networks. The rub being, they only approve devices that they control from a sales standpoint. The "subsidy" is driven by the carriers who demand control so they can sell stuff on those devices that they have deemed ok to be on their network.
In simple terms, the business is not competitive. If the ISPs of yore required you to purchase a special modem to dial up, instead of requiring we use a Hayes compatible modem, we'd likely still be in dial up days and purchasing dial up services for 10 cent a minute to have this discussion.
said by fiberguy :So now.. if a contract is what is screwing the customer, then how come people cry foul over cable and all their ill, who has no contract, when phone companies stick a contract on EVERYTHING these days and they, of all people, are the aviors? A good question, but many people are contracted with Cable as well. The only free space from contracts is Telephone at this point, and that may vary from state.
Unfortunately people are people. Markets are markets.
Competitive markets provide more equal balances.
Where equals compete to sell and buy, prices tend to stabilize. Do we agree on that at least?
said by fiberguy :p.s. - there is still cell phones with out contracts. p.s. - you have defined the competitive market cell companies fear, it is like the carterphone decision 1.5 (2.0 if you just buy your favorite phone and activate it with your preferred carrier of the day, week, month, year with appropriate pricing incentives for commits). Crazy I know, but when will the first ballsy carrier offer contracts by individual? Scary new world that may never happen...but would in a purely competitive environment.
p.p.s. - if it weren't for government monopoly/franchising,
many in rural america didn't have tv, hence Community Antenna TV. The digital box there is no more necessary than the cellular phone to use the service, other than by carrier design.
Sounds a lot like we are in the same business. I read a lot and often disagree with you, but I respect your thoughts and do acknowledge your point of view (just don't often disagree or agree enough to bother responding).
Final thought...no matter how you cut it, the network is getting less expensive from a capex and opex perspective.
It's short term in the carrier world and long term in wall street world. | |
fiberguy
My views are my own.
Premium
join:2005-05-20
edit:
January 26th, @12:31AM
| Ok... You're talking about a retail environment and we're talking about a service industry (communications) which is totally different. The two don't argue the same way.
Also.. I'm curious where all these cable TV contracts are coming from? Cable is well known for now requiring contracts. | |
xsiddalx
join:2005-03-11
Chicago, IL
·AT&T Yahoo
·AT&T DSL Service
| said by fiberguy :Ok... You're talking about a retail environment and we're talking about a service industry (communications) which is totally different. The two don't argue the same way. Are you suggesting that we individuals are wholesale customers and can opt into individual contracts?
Communications is a retail business, predominantly.
Telephony, Cable, Satellite, Cellular, ISP....they are all retail.
They all have wholesale arms are well.
It is simple.
Examples:
Telephone companies sell wholesale to LD and CLECs.
Cable sells wholesale to religious channels and shopping.
Sat....follows cable
Cellular sells wholesale to SMS providers (american idol?)
ISP (often all of the above now) have similar deals.
said by fiberguy :Also.. I'm curious where all these cable TV contracts are coming from? Cable is well known for now requiring contracts. I don't understand. Your question answers itself.
If your asking about cable companies, they were started on the same monopolistic guarantees as telephone companies. They are still requesting deregulated pricing offered under the telecom act of 96 for basic service. Cable franchises and prices were originally offered at at a given rate of return for a set of basic services. The TA96 gave them freedom of return based pricing for basic services once competition hit a certain level.
Just in case I misinterpreted, cable contracts are certainly a minimum of 6 months of more depending on the market and digital upgrades are required with a modem rental, which amount to the equivalent of renting a telephone. Any box would be cheaper sold at walmart if it met cable specs. Any phone would be cheaper if sold at walmart if it met cell company specs.
For the record, I have only shopped at walmart mart 6 or 7 times in my life.
I don't think I understand your differentiation. Service are sold by barbers, goods are sold by grocers. Neither of the two require contracts as the norm, nor do the contracts necessarily equate per customer. | |
RadioDoc
Sortofadog
Premium,ExMod 2000-03
join:2000-05-11
Chicago, IL
·AT&T Midwest
| I love reading what you write. It's probably the clearest analysis/argument posted in this thread.
Just a little data point for your cable contracts: Offering a rebate at the third and sixth months is the equivalent of requiring a three or six month contract to get a discounted rate. While they claim "no contracts" the reality is you pay rack rate without pretending you are in one.
--
Toolmaster of La Grange. | |
xsiddalx
join:2005-03-11
Chicago, IL
·AT&T Yahoo
·AT&T DSL Service
| said by RadioDoc :Just a little data point for your cable contracts: Offering a rebate at the third and sixth months is the equivalent of requiring a three or six month contract to get a discounted rate. While they claim "no contracts" the reality is you pay rack rate without pretending you are in one. Good point. I just go off what my 80+ grandmother's sister tells me about her comcast phone service, and lack of ability to change, and what I read on the billboards & tv adverts.
Semantics suck....
Contracts are contracts.
Rebates are rebates.
Coupons are coupons.
Mixing the three makes for interesting discussion.
Never thought I'd see the day that my grandparents would no PIC their LD (and get charged to do so at the benefit of the telco).
I'm satellite, telco, cellco. Separate and cheaper. | |
RadioDoc
Sortofadog
Premium,ExMod 2000-03
join:2000-05-11
Chicago, IL
·AT&T Midwest
edit:
January 26th, @02:03AM
| said by xsiddalx :I'm satellite, telco, cellco. Separate and cheaper. Indeed, me too. If bundling didn't make the providers more money they would not offer it.
--
Toolmaster of La Grange. | |
fiberguy
My views are my own.
Premium
join:2005-05-20
moderated:
January 28th, @12:34AM
| reply to xsiddalx
Typo.. cable is well known for NOT requiring contracts..
Additionally, the difference between a retail and a service industry is pretty clear. WalMart is retail, and Applebees is a service industry.
In order for Cable or phone to sell you something, there is a great cost involved in putting it out to you.. there is the provisioning, installation, and the entire process involved in getting that to you. They do charge either no or a little installation charge to get you going and it takes time to earn that back. Wal-Mart has a product.. a fixed price 'grab and buy it and leave with it' scheme.. They are two different things in this case.
You can argue it out and make the two look the same, however, they aren't.
Having to stay to earn your bonus over time is NOT a contract. A contract, in context of the conversation, is saying you must continue to purchase - period. Penalties for breaking out.
The "get 12 monthly credits" type of thing is a loyalty program and you can break it at anytime. | |
fiberguy
My views are my own.
Premium
join:2005-05-20
| reply to RadioDoc
said by RadioDoc :Just a little data point for your cable contracts: Offering a rebate at the third and sixth months is the equivalent of requiring a three or six month contract to get a discounted rate. While they claim "no contracts" the reality is you pay rack rate without pretending you are in one. You REALLY love stretching things and spinning, don't you? | |
RadioDoc
Sortofadog
Premium,ExMod 2000-03
join:2000-05-11
Chicago, IL | Evidently not as much as you love mindless arguing.
--
Toolmaster of La Grange. | |
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