Thread: 50MB Broadband now just £18 per month
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Old 11-09-2009, 20:20   #133
Sir John Luke
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Re: 50MB Broadband now just £18 per month
Quote:
Originally Posted by Traduk View Post
Having been in business myself there is always an upfront and fall back logic behind apparently ridiculous decisions.

The fact that they are discounting implies that the higher price is the price they desire but for however long they choose they will discount. At some point in time they can increase prices, but avoid touching the headline price, by clawing back part of the discount. They would have the argument that the headline price is unaltered but the discount (which they graciously gave away) has been reduced.

I had this discussion with sales when they wanted to trim my retention discount over and above the 20\50Meg differential. Neither of us got a deal because my stance was that a new contract was worth more to them than a small claw back and unless recognised within price they would get 100% of nothing.

They IMO have given themselves room for manoeuvre and at some point will implement that option. If en bloc VM customers were to be canny buyers then nobody would buy into 50Meg and price would have to fall. If on the other hand they buy in droves then STM and price rises will follow whenever a critical mass of such customers is acquired.
Plus the fact that if they priced (say) 2MB at £20, rather than £37 with £17 discount, they would presumably have no grounds to continue charging existing customers more than £20.
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