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NewNet asks customers "pay more or use less?"
Monday 12 November 2007 12:10:43 by Sebastien Lahtinen

NewNet has become a popular ISP in the last couple of years, particularly with users who download more than the average person due to competitive pricing. These heavy downloaders have tended to switch broadband providers as usage policies, limits or charges have come in. As time goes by, one by one providers have introduced these types of controls to varying degrees to cope with the problem of heavy users clogging up the bandwidth.

On Friday, NewNet sent an e-mail to its customers, but rather than notifying them of a change in terms and conditions, they have sought customer feedback to work out how to proceed:

"Have your say on changing the way we provide our broadband bandwidth. We are constantly monitoring the profitablity of our services and increased usage on a number of packages has made them unprofitable, so we need to make some changes. We have two options.

* Increase the recurring charges
* keep recurring charges the same and reduce the bandwidth quotas"

E-mail from NewNet about broadband usage limits and charges

Perhaps one option available to NewNet would be to introduce new products such that users have the option of the existing price, but with less bandwidth, or the existing included data limits at a higher cost. Whilst not ideal, it will mean only those who require the extra bandwidth will be forced to pay more. Our users views can be found in the NewNet section of our forums.

Customers will have until 15 November to respond to the survey.

Comments

Posted by CARPETBURN over 9 years ago
I suspect many will just leave rather than wait and see what they do. Or bother to waste their breath with what they think.
Looking at the Newnet packages I can NOT spot a product that doesnt already have a monthly quota or peak and off peak like hours...
Maybe they should have a third choice for customers which would be... In future only offer what you can afford.
There is no doubt Newnet is a great provider, however as an example 24Mb customers already pay £32.95 for their so called unlimited service (which is nothing of the sort)(continued)
Posted by CARPETBURN over 9 years ago
while bethere customers for the closest equivelant service only pay half that at £18, and it doesnt have a fixed monthly cap or peak/off peak hours.
Im sorry but this is typical of ISPs that start losing money, blame the customer, rather than blame your product range and the prices you attach to it.
Posted by adriandaz over 9 years ago
Seems fair enough, although they could probably redeem their profit by kicking off the top X many leechers, but instead they are offering a choice. Do BE/O2 make a profit? I wonder...
Posted by peterperfect over 9 years ago
I would like to point out that this only applies to some of our loss making services and will only effect around 5% of our customers. None of our 24Meg BE type service are effected only users on our Home 'B' & 'S' service.
Posted by peterperfect over 9 years ago
NewNet are the only provider I am aware of that provides true unthrottled services. All other providers apply some kind of QoS to their users connections.
Posted by CARPETBURN over 9 years ago
quote"I would like to point out that this only applies to some of our loss making services and will only effect around 5% of our customers. None of our 24Meg BE type service are effected only users on our Home 'B' & 'S' service."
That doesnt make sense (if im readin right) the home 24Meg services when they go over quota only pay 0.70p extra per gig while the 8Mb home customers pay £1.10 extra per gig already... Why not just raise the price per extra gig quota on the 24Mb services inline to that of the home 8Mb services??
Posted by peterperfect over 9 years ago
24Meg LLU services are provided over our own LLU network rather than over BT's so our overhead costs are less. I realise it is confusing. We are attemtping to pass that price saving with larger quotas for LLU customers.
Posted by c_j_ over 9 years ago
"bethere customers ... only pay (snip)"

Be are (still) in customer acquisition mode. Once something fills up and becomes a bottleneck, and significant investment is needed to maintain performance, what do you think will happen? Same as happens anywhere else. BANDWIDTH COSTS MONEY.

"... aware of ... All other providers apply some kind of QoS"

"ALL" ??? Not just "all major" (eg BT, CPW, Sky, Tiscali, etc)?? Are you *really* saying the likes of AAISP, IDnet, Zen (etc) are ALL doing the QoS thing?
Posted by herdwick over 9 years ago
"All other providers apply some kind of QoS" a bit of negative marketing about the competition perhaps ?
Posted by adriandaz over 9 years ago
or just stating facts?
Posted by herdwick over 9 years ago
"or just stating facts?" no chance. Lies, maybe, but not facts. But if he can say (and prove) what sort of QoS each and every ISP is using and prove himself right with references I will gladly change my opinion.
Posted by CARPETBURN over 9 years ago
quote"24Meg LLU services are provided over our own LLU network rather than over BT's so our overhead costs are less. I realise it is confusing. We are attemtping to pass that price saving with larger quotas for LLU customers."
Still doesnt make sense, you are talking about one option being raising charges, yet the simple measure i mention instantly gives you more profit and would still be fair to customers as the rate per ADDITIONAL gig would be the same. (continued)
Posted by CARPETBURN over 9 years ago
Doesnt matter if BT costs are higher in this case, as you are providing a LLU service in addition its clear more money could be made there while still remaining fair to your customer base as a whole.
I also agree with herdwick i cant believe for a second you are the only provider that doesnt have any QoS in place, and even if you are maybe thats whats got you into this pickle in the first place?
Posted by CARPETBURN over 9 years ago
There is no doubt Newnet is one of the better providers in this country, but you cant go around blaming customers or increasing charges on customers that are simply taking advantage of a service you provide for the costs you have provided.
Posted by keith_thfc over 9 years ago
"NewNet are the only provider I am aware of that provides true unthrottled services."

PeterPerfect - My understanding was that Zen, be*, UK Online and SKY are all unthrottled, to name but a few.
Posted by uniquename over 9 years ago
@CARPETBURN. You seem to have a somewhat uninformed idea of the situation as viewed by most Newnet users. There have been a few unhappy posters on the forum on this site, but I don't think anyone feels we are "being blamed" or that the changes are "unfair" or unnecessary.
Posted by uniquename over 9 years ago
On the contrary PeterPerfect, (the CEO for those who don't know), has done his best to inform us and ask for opinions on some changes caused by the alteration in usage patterns over the last 12 months. Those changes have affected all ISPs, and even if foreseen, the appropriate pricing structure now would have been inappropriate then.
Posted by uniquename over 9 years ago
There is also a thread with a charging pattern proposed by a user being discussed. No doubt PP is reading it with interest.

Neither do I think embryonic LLU services being introduced by Newnet should have artificially high prices to subsidise the IPStream products. The effect on profitability of the rise you suggest would be infinitesimal. It would merely delay or prevent LLU take-up and hence roll-out. Newnet IPStream customers are all wanting LLU NOW!

Please go and rant about something you know about. That would save you an awful lot of time you waste posting on the forums [tongue].
Posted by aps2011 over 9 years ago
NewNet was probably trying to be consultative and gauge customers' feelings when it asked for the feedback. However, it appears to have stirred up a hornets nest and upset light and heavy users alike. Possibly people don't like the uncertainty over future prices & service.
Posted by juliant over 9 years ago
I have just been told that current S users will also fall in line with the dropped allowance of 20gig. Wonderful
Posted by gayboy-ds over 9 years ago
Stand or Deliver?

Hmmmm I would just leave. Have Newnet ever heard of the phrase "vote with your feet"?
Posted by CARPETBURN over 9 years ago
quote"Neither do I think embryonic LLU services being introduced by Newnet should have artificially high prices to subsidise the IPStream products. The effect on profitability of the rise you suggest would be infinitesimal. It would merely delay or prevent LLU take-up and hence roll-out. Newnet IPStream customers are all wanting LLU NOW!"

Im shocked people actually take their LLU service over betheres anyway. With bethere you pay less and get more, so i dont see how raising the additional price per gig over your allowance would make any drop in profit For the newnet LLU services.
Posted by CARPETBURN over 9 years ago
quote"Hmmmm I would just leave. Have Newnet ever heard of the phrase "vote with your feet"?"

Thats what i would be doing if i were a customer, its the best vote and the most listened to one you can make.
Posted by jamescg1972 over 9 years ago
Quote "quote"Hmmmm I would just leave. Have Newnet ever heard of the phrase "vote with your feet"?"

Thats what i would be doing if i were a customer, its the best vote and the most listened to one you can make. "

Leave to whom exactly?
Posted by CARPETBURN over 9 years ago
quote"Leave to whom exactly?"

It wouldnt matter in the sense of this story. Just leaving is enough to say you are not happy. In my case i have more than one LLU service i could pick so for me the decision would be pretty easy, for others and who they move to that is down to individual requirements.
Posted by kamelion over 9 years ago
where is the third option?

Get rid of all the heavy downloaders so that the people who don't abuse the service can continue to enjoy an unthrottled connection.

Of course I doubt this will be added as newnet have gained most of their customer base from the heavy downloading community in the first place. Asking their customers what they should do just seems to me like they haven't got a clue how to run a profitable business.
Posted by zenops over 9 years ago
Posted by keith_thfc about 23 hours ago
-snipped-My understanding was that Zen,
-snipped-

That's correct keith in respect of Zen. can't speak for anyone else obviously :-)

Regards
Gary
Posted by uniquename over 9 years ago
[i]"newnet have gained most of their customer base from the heavy downloading community in the first place"[/i]Where did you get that info? Answer - out of your own head and nowhere else! (Newnet customer and perfectly happy with the change already made).
Posted by kamelion over 9 years ago
"NewNet has become a popular ISP in the last couple of years, particularly with users who download more than the average person due to competitive pricing. These heavy downloaders have tended to switch broadband providers as usage policies, limits or charges have come in. As time goes by, one by one providers have introduced these types of controls to varying degrees to cope with the problem of heavy users clogging up the bandwidth."
Posted by Speedingfine over 9 years ago
Heavy users are mostly downloading video files which can be done automatically at off peak hours, Isp's have the ability to limit the speed of different types of connections of individual users, it's the capacity of the line not the actual volume that passes through it that costs the money, isn't it? - so I don't really see that heavy users (the responsible ones of which do schedule their d/ling during off peak hours)are that much of a problem. It seems to me that charging extra for Gb's over, is just another way of upping revenue - while attracting customers with a low 'basic' price.
Posted by tonteg over 9 years ago
I would not agree with CARPETBURN, I am not with NN but was thinking of joining them as a light user,having read most of the posts (not here)About 60% of their clients are light users 3GB. They seem to be happy. CARPETBURN suggests they walk away!!!?.
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