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Originally Posted by Chrysalis
ntl like bt wholesale have costs of around 10-20p per gig, a user downloads 100gig it costs ntl £20 in bandwidth costs not £200. Of course it is a different matter if usage patterns are causing a ubr to be saturated and money is spent on upgrades, but even these upgrades are one of costs and so are can be recuparated. NTL are lacking a £50 product with a 150gig limit, and yes that is profitable for a isp of NTL's size.
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If we take the cost of 155Mbps CBC BT Central which is £316,20 0 per year, this equates to 52p per GB transferred. I know that this price includes a profit for BT and that LLU ISPs may have a lower cost per GB. The first thing to note though is that price per GB is only 52p if the pipe is running at 100% capacity 24/7/365. Naturally if it is 100% utilised there will be contention issues for users who are routed through it. There are also many other costs involved which include such things as provision and maintenance of equipment which increase as the volume of traffic increases.
Where customers are placed geographically and their usage patterns affect the cost of providing the service. It is a constant battle by NTL to keep the network running at optimum levels so that customers are not unduly affected by changes in usage patterns and they do that very well. This can only be done by having sufficient capacity to deal with these changes which means that costs have got to be higher than what they would be with 100% utilisation.