Quote:
Originally Posted by Horizon
The upgrade is most welcome, I agree. But I do argue with the "we're getting it for nothing" point.
The last time I looked, I pay a lot of money to VM each month and by VM's own admission, a lot of that is pure profit to them. Aka telephone line rental, which is in fact a connectivity charge. You're paying just for the "privilege" of being connected to their network, they don't do anything for that dosh.
Once VM have the relevant kit in place (which of course does cost them) then whether they're pumping 20mb, 50mb or 100mb down the same pipe is neither here or there. It does not cost VM anymore or less what speed is sent with STM in place.
After network upgrades, usually for broadband, the only real costs for VM lie on their tv side where they do need to pay for things like fixing faulty stbs, agreeing with broadcasters over carriage rights etc and of course staffing costs.
VM are not upgrading the broadband speeds out of the goodness of their hearts. It's a cold business decision based on what they can afford to do, wish to do and what their competitors are likely to do. The marketing opportunity that the Olympics brings should not be underestimated.
VM may say they are not launching anything over 120mb this year, although that's not what they've told the City... But I bet they will launch 200mb+ (might even be 1gb) in one location and you'll hear about it everywhere come Olympics time.
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Yes some of the money we all pay to VM goes into profit for them. They are a commercial organisation not a charity. Like other commercial organisations they will balance the service they offer with the prices they charge and the profit they make. I will be the first to say that there are too many companies out there that focus on pure profit and pay little attention to the service offering. A return to putting the customer first is long overdue in my opinion.
VM is not perfect - the laughable helpdesk is a great example of where they have got things totally wrong and seem to be ignoring cutomer views. Compare with many other organisations notably banks, bringing such service back in house.
You are absolutely right the phone line rental is a connectivity charge, however that does not come free to VM. They have to install & maintain the cable plant to get the connection to you. They have to host and maintain exchange equipment at their end of the line to provide service. They have to pay for interconnectivity between their voice network and other carriers. All of these elements cost them money.
In terms on internet costs, the new line cards, software upgrades, software licences etc are significant costs to VM. Node splits to increase effective capacity often require new fibre to be run between the central hubs and street cabinets. They have ongoing maintenance charges on all the equipment they use. Often this can be some 20% of the original purchase price annually.
Now on the other side there is a lot more they could be doing. The dire over-subscription in some areas is poor. They are selling a service in some regions that they cannot provide effectively, yet still continue to sell.
Overall I think VM provide a good service. Sure they can and should do more, but on the whole it's good. If you look at the doubling of speed at zero cost and also the general reduction in prices over the years the deal isn't bad.
As consumers we will always want more and pay less. However there comes a point where this is not sustainable unless service suffers.