Posts Tagged ‘cost’

Hardly news, but: Vodafone NZ sucks

They finally (hard to believe they waited this long) released their iPhone plans (the website is barely up at the moment – they own the second largest ISP in NZ, and can’t handle a bit of load!).

I knew that the data would be expensive here, although I had a little hope when I saw the costs in Australia.  This is much worse than I thought it would be, though.  Are people really going to pay $250 per month?!?  I guess so, but you’re excluding vast numbers of people that would be otherwise interested in this month.

My guess is that the cost is indirectly Apple’s fault.  At the WWDC keynote, Jobs pointed out that the cost around the world would be as low as (or lower than) the new US price – no doubt Apple enforces this in their contracts with the providers.  Vodafone NZ doesn’t want to sell the phone for $199, but has to, so simply raises the contract price until they get what they want out of it anyway.

This is twice as expensive as the US or even the complaining Canadians.  And we have a reasonably decent 3G network, so the phone would have been useful here.

The “250” plan costs $2,619 for 24 months.  For that, you get the phone, 120 minutes, 600 txts, and 250MB of data a month.  I’d pay that, but 120 minutes isn’t enough (we used about 200 minutes last month), and 600 txts are barely enough (580 last month).  It’s the data that breaks the deal – 250MB is about 8MB a day.  IOW, barely enough to check email and use the map occasionally.  My Zabbix status page is about 3MB.  I could check it twice a day.  Ridiculous.

The “500” plan costs $3719 for 24 months, and gives you the phone, 250 minutes, 600 txts, and 500MB of data a month (16MB a day).  Perhaps enough data to use the phone as long as you were really careful and around accessible wifi a lot.  But that’s a big jump in price.

The “1GB” plan (I can’t believe that’s the largest!) costs a whopping $6349 for 24 months (3 and a third brand new iMacs!).  600 minutes, 600 txts, and 1GB of data (32MB a day).  Too many minutes, and still not enough data, although it’d be useable.  But $250 per month?  There’s no way that I can justify spending that, even as a business expense (I would be using it to check the status of servers while out).

A 2GB plan (paying the overage cost) costs $7069 for 24 months.  600 minutes, 600 txts, 2GB for $280 per month.

The other option is to stick with our current plan and add a data pack.  We currently get 60 minutes, 600 txts and also have three “best mates” (unlimited txts, pxts and calls) for $46/month.

With the 200MB data plan added, the cost is $2950.75 for 24 months.  That’s only just more expensive than the iPhone 250 plan, and would suit us much better (the best mates make all the difference).  The difference between 8MB of data a day and 6.45MB of data a day is the difference between barely using the data and barely using the data.

With the 1GB data plan added, the cost is $3430.75 for 24 months.  Less than the iPhone 500 plan!  Twice the data for less money!  What are they thinking?  More importantly, what are the suckers that sign up for this thinking?  Sure you get 120 minutes with the iPhone plan, but we have three best mates that account for vastly more than 60 minutes of call time.  Given that most of the calls and a large proportion of our txts are to those three people, we get better value for exactly the same usage for close to half the price.

So: is it worth another $50 per month (and $1129 upfront) to have the iPhone?  That’s a large chunk of money.  It’s a great device, and we absolutely would use the GPS/mapping/data functionality that our iPod touch lacks.  Lots of thinking in the next couple of days!

A final note: the iPhone itself is $1129, the iPod Touch is $449.  $680 for GPS, calls, txts, and (for lots more money) data while not connected to wifi.  Pretty steep.


There was a lengthy discussion on this week’s TWiT about bandwidth metering; the topic was discussed on the Daily Source Code for a few episodes a while back too.  Although Dvorak is often excessively inflammatory and I don’t always agree with what he says, this was a case where he was clearly right and everyone else (well, Leo really did all the talking) is wrong.

The biggest problem is that Leo is confusing two separate issues:

  1. how much you pay for your Internet access, and
  2. do you pay based on how much you use.

These are not the same thing!  Does Leo really think that unlimited Internet usage will stay the same price forever?  If the ISPs want to make more money, they just all put their prices up – they don’t need to muck about with changing how they charge people (which is much more work on their end).

I agree with Dvorak‘s 8 reasons – but it really just comes down to #3 and #4.  I should pay more than my parents do, because I’m using more.

The comparison to water is nice, but very flawed in that there isn’t a lot more that you can do with water.  If I had “all you can drink” water for a single price, would I use more?  Well, maybe a little – I guess people might have baths more than showers, and maybe pool usage would increase.  People might waste less, although I doubt people that avoid wasting water now are really doing it to save a few dollars.  Compare that to unlimited Internet access – there’s really no limit in sight as software gets larger, services move to the ‘cloud’, and audio and especially video online takes over from offline sources.

In the modern economy, are there any resources that are provided (other than those that nature provides) that are not metered?  Over-the-air radio and TV aren’t, but there’s no consumption, either – no matter how many TVs I have receiving an over-the-air signal, the ability of my neighbour to receive the same signal is not effected.  In NZ, local phone calls are unlimited, but that’s enforced for by the government, and from what I understand there’s little effect on my neighbour if I use the phone more (and again, there just isn’t room for much more use – there’s a strict 1440 minute limit per day per phone).

Electricity would perhaps be a better example – there’s an unlimited supply, and much closer to unlimited demand.  (The unlimited supply comes from a willingness to spend money on nuclear/solar/hydro/wind/etc generators, but unlimited Internet access supply comes from spending money on fibre/cables/satellites/etc too).  Is anyone arguing that electricity should be ‘all you can eat’?

Actually, my bandwidth is metered (from TelstraClear) – I’m not sure if there are any other ISPs in New Zealand that offer this.  I pay a base rate (covering overheads) and then a fixed price per 10GB.  There’s no limit to how many GB I can use, but I pay for each.  There are problems here:

  1. it’s not granular enough – it should be 1GB (you can meter in 1GB blocks, but the per-GB price is higher), and
  2. the price is really too high compared to elsewhere in the world.

If those problems were fixed, however, I would still have no problem with metered pricing.

Leo tried to argue that there’s no cost to bits.  While Dvorak argued this, I don’t think it came across just how wrong Leo is.  It doesn’t matter how much peering goes on, somebody eventually has to pay for creating and maintaining the ‘pipes’ that the bits are moved through.  Those pipes have a fixed capacity, which means that there’s limited supply.  If there’s limited supply and limited demand, then the only fair solution is to charge based on the amount that is used.

I’m sure that the a chunk of the motivation on the ISP’s part is to be able to make more money – but they are aiming to make more money by being more fair.  My argument is that the prices are going to rise anyway, so wouldn’t it be better to have things fair now?

Leo is concerned about the viability of services like TWiT Live and Revision3, since if people are paying for bandwidth they will be less likely to use it on Internet video (when over-the-air TV is still free).  I don’t see that as an argument against metered bandwidth, though, but as an argument for lower pricing.  Are people reluctant to turn on the tap to get a drink because that will increase their water bill?  When do you ever hear “Sorry, honey, we can’t watch Lost tonight because the TV will use up extra electricity”?  That’s because the per-unit cost of water and electricity is low enough that people don’t care about using a bit more.

Note that you do get people reducing waste water/electricity.  If you’re not using a tap, you turn it off.  Electronic devices have power-saving features (some people even turn their microwaves off when they aren’t using them, and so on).  But that would be good for the Internet!  What possible benefit is there from me leaving TWiT Live streaming on my computer when I’m not even there?  Does Leo really want to pay (or have sponsors pay) the bandwidth for that sort of wastage?  (This is Dvorak’s reason #8, which seems dubious until you think it through).

What Leo (et al) are arguing is that everyone (or perhaps everyone outside of business) should pay the same price for Internet access, no matter how much they use.  I simply can’t agree with that.