we get ripped off so much here in the UK! i know some people from spain, france etc. who have 10mb broadband and paid what we did for 2mb - this was a while back (1 year ago), so you can imagine how cheap it must be now. But no, as with everything else we have to get everything at double the cost!
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which broadband is the best??? watch
- 16-04-2006 00:19
(Original post by ghost101)
- 16-04-2006 00:20
k, still find it astonishing though.
I could imagine going into his room with huge piles of DVDs everywhere
(Original post by rahmed)
- 16-04-2006 00:24
But like i said before, he needs it uncapped because at certain times, not all he exceeds 50Gb, it could be that he uses only 2Gb one month and 60 another.
For example, if you had to write down a list of things you want to download that totals 50GB, could you?
Im not interested in enough tv shows, films and games dont come out that fast either.
(Original post by ghost101)
- 16-04-2006 00:37
But why does cheap mean poor quality service, cheap could imply mean smaller profit margins. Smaller profit margins doesnt suggest that they are spending less per unit of output. I think it is a sign of competition in a market where it is dominated by a few firms (bt 23%, ntl 20%, telewest 14%).
You suggest that companies buying up each other is the only method of growth because broadband uptake has slowed down. Broadband is highly price elastic because there simply is no alternative and this is why we pay high prices in the UK. We have a few companies controlling a large market share and they are exploiting the fact, there are a few companies that households are willing to place their trust in. This in combination with the absurd 12 month contracts some firms employ are the reasons for high prices.
The broadband market is inflexible, and by combining it with other sevices such as tv, it compounds the problem. It creates monopolies that will use their power to raise prices to rates that they can get away with.
I would rather see, tv costing x, internet y, and telephone z. The cheapest and most allocatively efficient possible rather than cheaper prices only offered when combined with products. The comparison with france and south korea are astounding where competition forces companies to give amazing offers. I would much rather have that situation instead of whats happening in the UK.
In a market where there are large fixed costs and where marginal costs are minimal, it always tends towards a monopoly because a firm that can employ the highest level of productive efficiency through increasing output will always have the cheapest product. The telecommunications industry has changed and is still changing. Fixed costs are decreasing, and the internet makes it much easier and cheaper to reach an audience that use the internet. The trend should not be for firms to be charging premium prices for a "quality" service but a competitive price for the market. After all all the products in a market are the same.
Carphone Warehouse have started something that will be much more prevalent as technology improves and more firms get in on the act (mobile phone companies). Where there is abnormal profit, there will always be firms undercutting you (doesnt nake them worse).
Companies will get "smashed" in a competitive environment. I dont particularly need an isp that has to last for more than 6 months. I would save money in the long run instead of paying a premium for having the privilege of having the name BT at the top of my bill.
people want 100% reliability and as close to top speed as possible from their broadband. they want a phone line that is functioning 24-7-365 - no excuses. they want a proper choice of TV channels available at their location. they want support, again 24 hours a day, based in the UK. they also want this support free of charge or as cheap as possible. they want low commitments - as you mention 12 month contracts arent that popular.
however to achieve customer expectations the companies are going to have to charge a lot of money. rough costs, currently, are as follows - £10.50/month to BT for phone line rental, then add any call options and charges. going rate for most broadband ISPs (with decent usage limits) is £20-30/month. for mobile phones i went to orange and looked at their contracts - upwards of £20/month. sky ranges from £15 to £45/month depending on what you decide to get. also remember in some cases there are connection or set up charges. if we add this up it comes to £65/month at the very minimum and possibly a lot more if you make a lot of calls or use a lot of bandwidth or want a lot of channels.
reckon providers are planning to charge this much? if you asked joe public in the street how much they'd like to pay in total for all their services would they say £65+ each month? i dont. of course companies merging and streamlining will hopefully reduce costs as will the passage of time - a lot of prices can fall in the space of 6 months let alone any sort of distance into the future. i just hope companies are wise and build in some margin for future investment. if they run it, like a lot of broadband companies do, to the point where they make pennies a month from each subscriber then there are going to be big problems for companies and big headaches for subscribers. they'll either have to charge bigger money than people expect or run their operations very very tight. investors dont like tight or the words loss or small profit - they like big profits.
a lot of these ventures planned for the next few years are doomed to failure in my view and thats going to be a nightmare for thousands, perhaps millions of people up and down the land. of course that'll be city folk mainly, few companies besides BT seem to have any plans to go anywhere near towns and villages.
i hope im wrong and that it is feasible but i get the impression the impending price war that seems inevitable will be catastrophic for companies and consumers.Last edited by technik; 16-04-2006 at 00:41.
- 16-04-2006 00:48
Firms will be content with a small profit. Abnormal profits are those wich are above the minimum needed to keep the firm in the market.
The charges that you have mentioned. They are not guides to what the product cost to produce. Especially mobile phone contracts.
They are not making big profits, they are making huge profits which will inevitably attarct firms into the market. Investors are not going to invest??? If the return is above the interest rate they will (with a premium for risk).Last edited by Jaffaholic; 17-04-2006 at 00:34.