Teksavvy announces price increases of up to 15%

[johnto]

What am I missing?
Teksavvy claims 300G DSL prices are going up?

I am not seeing this. I now pay 67.97 for 300G and it is going down to 52.99 with unlimited between 2am and 8am.

Is there are variable portion to be charged based on use during peak time?

Thanks

[LEAKY ROOF]

I'm confused also, it seems my 16 DSL 300G will be will be decreasing by $10 a month according to the new pricing notice.

[TorontoColin]

Yup, monthly pricing on the capped 12/16/25 plans is going down, and they're adding the unlimited off-peak bonus. Nothing but good news for those users, as far as I can tell.

This brings it more in line with the equivalent cable packages. In fact, all these changes seem to make the various internet options scale more evenly based on speed, rather than medium.

[markf]

Before this was all settled, the FTTN speeds (12/16/25) were offered based on approved interim rates. There was also the possibility of retro billing to TekSavvy and others offering these packages if the final pricing was higher and a UBB type scheme was implemented.

With the capacity based model that was ultimately adopted, the prices for FTTN services dropped and the "unknown" element was removed. That likely explains the lower prices for these higher speed tiers.

The capacity model also allows for the 2 am to 8 am (one ISP, can't remember who stretches that to noon), recognizes the fact that network utilization is very low during those hours, so they have spare capacity to use. If they can use that paid for capacity to entice some users, then its a good strategy. If it becomes too popular and they start to push the limits of their purchased capacity, they'll have to remove this option.

[LEAKY ROOF]

Thanks for the explanations. I guess I could start a new thread titled " Teksavvy announces price decreases of up to 18% "

[Francois Caron]

That's what so funny! TekSavvy's 300 GB cap is already very generous even for their heavy users, and now they have an "Unlimited" window!

BTW, it's Electronic Box that offers the 2 AM to 12 PM Unlimited window, and it might work. Nearly everyone that launches massive downloads at 2 AM will very likely be done by 8 AM. What will be left will very likely not affect EBox since the morning hours already see very little bandwidth consumption at all.

Something tells me Bell just might regret the CRTC's decision. Many applications already support scheduled downloads, including gaming portals such as Steam. Watch Bell's bandwidth meters go IN-SANE shortly after 2 AM, and they can't bill any of it!

[markf]

Based on the model adopted, if an ISP saturates their purchased capacity at any time, either their customers will experience slowdowns or the ISP needs to purchase more capacity.

ISPs oversubscribe, so if I have 10 x 25 Mbps customers in an area, I might buy 100 Mbps capacity and hope that they don't all use max at the same time. If Tek or Ebox finds that their connections are being saturated at 2 am by auto downloads, they may have to limit speed (in this example, everyone could get 10 Mbps), close the window, or buy more capacity. The assumption is that this won't happen and they'll have sufficient capacity in their pipe to handle this. Like the hydro system, there is usually excess capacity in the overnight hours, so if one user increases demand the system doesn't have to expand to meet that demand. During peak periods, if users increase demand, new infrastructure (capacity) is needed to meet that need.

For Bell it shouldn't matter. If Tek buys 100 Mbps (for example) and that runs full out for the entire month, it doesn't cost Bell anymore than if Tek buys 100 Mbps and doesn't use it at all. The idea was that independent customers were using a disproportionate amount of network resources. They tried UBB which didn't really get to the heart of the matter, now that it is capacity based, Bell needs to have the capacity that IISP's purchase in place for their dedicated use and cannot complain about how much IISP customers are using.

It costs more to offer higher caps because the likelihood of a 500 GB/month user saturating their connection at peak times is a lot higher than a 50 GB/month user. It is true that this might not be the case, but you are using a higher percentage of your capacity if you consume more internet than someone who uses less. People who use more lower the oversubscription ratio and thus cost more to provide service too. This is reflected in the higher rates charged.

As they mention, prices are subject to change, depending on the usage patterns they see and potential increases in necessary capacity per user.

[hugh]

markf, what you say makes perfect but TS's pricing is not consistent with that reality which is why I have trouble believing what they say.

Why charge more to an unlimited downloader when, by definition, the bulk of their downloading is done when the network is underutilized? TS is charging $15 more for unlimited service when in fact, it probably costs them nothing extra to service the unlimited customer because they are no more saturating the pipe during primetime than the under 300GB crowd is saturating the pipe.

So, in fact, the $15 extra from heavy downloaders is pure profit.

If TS's concern really was peak congestion, as they suggest, then the rationale business thing to do is what I have been advocating for years and what the airlines, hotels, electricity generators and restaurants do. Charge more for peak times and charge less for off-peak times.

From a business perspective, by not charging peak pricing, they are increasing their costs substantially because they have to overbuild capacity during peak times.

I'd love to see the numbers but my gut is that the majority of "unlimited" buyers probably don't even hit 300GB a month, rather they buy it for "insurance."

[Francois Caron]

Hugh, that's exactly what I did. But during the last few months, I've noticed that my consumption has been consistently below 200 GB per month. With TSI's cap increase from 200 to 300 GB last spring, I'm now paying more for Internet service than I should be paying.

Time to adjust my account.

As for TSI "overbuilding" capacity, that's not necessarily true. Very often, increasing their capacity can be as simple as a purchase order if their gear is still up to date.

The use of monthly caps as a control is definitely silly. Nothing prevents everyone from trying to retrieve a huge mass of data at the very same time, which is why it's vitally important that an ISP NOT bill everyone on the very same day! The meter gets reset, and EVERYONE suddenly tries to catch up with their downloads at once!

Some ISPs in the UK found a better solution to manage their bandwidth consumption. If a customer goes over their daily limit before the end of the day, their speed will be diminished for the rest of the day.

[markf]

I think the important thing to recognize here is the fact that we have choice with respect to internet plans. If some people feel more comfortable paying the extra $15 for unlimited, they have that choice. With the unlimited window at night, I would imagine 300GB will serve most customers well. There are transit costs which TS must pay as well, which will cost more than 300GB customers. They probably also have a transit budget in which they have average usage per customer a lot lower than 300GB, but use the 300GB as a marketing tool. Yes, some lower usage customers will lead to higher profit margins than some of the higher usage users, even if it is not by much.

The current model is much better than imposing Bell's retail model on everyone. ISP's have a choice on how they bill, TS has chosen this route, Ebox is following a similar route and maybe other forward thinking ISP's will go with your suggestion of peak charges. Another idea might be to sell everyone up to 25Mbps lines under the assumption that if there is congestion, the speed will drop to some "guaranteed" speed, i.e. 5 or 10 Mbps. The marginal cost of a 25 vs 12 Mbps line to the ISP is fairly low, so some may choose this route as well as a way to compete.

It's not perfect, but we do have choice now. I think it is important to note that they did reduce all of their FTTN pricing for 300GB packages, in some cases by more than $10/month, so as someone else mentioned, the headline is somewhat misleading for the majority of their DSL packages.

This way is much better than shrinking caps and increasing prices that Bell wanted imposed on everyone.

You could sign up with an unnamed ISP in Ontario that advertises on their website a 6/800 DSL line with 300GB usage for $119.95. If Tek is profit taking on their prices, these guys are reaping it in if anyone actually signs up for that package.

[redzone]

anyone consider the new priceing structure a ploy to get people off the "unlimited" plans so they can pave the way to remove them ?

[Francois Caron]

I doubt it. It wouldn't benefit them financially to either keep or eliminate the unlimited plan, especially with their generous 300 GB plan still costing LESS than the unlimited plan under the new pricing structure.

Eliminating the Unlimited plan would also become a real PR nightmare for them considering their reputation for giving their customers what they want.

[johnto]

I don't know about that since they have added a bunch of unlimited packages that did not exist before this new pricing scheme.

Thanks for all the explanations.

I remain leary of Teksavvy's negative marketing and the ultimate impact the "variable portion" will utlimately have on cost.

I despise dealing with Bell and only use their services through resellers. Many others must not share my contempt as I do profit from their profiteering in share dividends and capital gains.

[ScaryBob]

Why charge more to an unlimited downloader when, by definition, the bulk of their downloading is done when the network is underutilized?

Their is no proof of that. They may do the bulk of their downloads at peak times, like most people, or use maximum bandwidth 24/7. On the other hand, people on capped plans now have motivation to schedule large downloads for off-peak times.

I'd love to see the numbers but my gut is that the majority of "unlimited" buyers probably don't even hit 300GB a month, rather they buy it for "insurance."

The concept of "insurance" is one promoted by Bell and Rogers due to their ridiculously high overage charges. It's not as valid for TSI since their overage charges are much more reasonable and their caps are much higher.

If TS's concern really was peak congestion, as they suggest, then the rationale business thing to do is what I have been advocating for years and what the airlines, hotels, electricity generators and restaurants do. Charge more for peak times and charge less for off-peak times.

That is exactly what TSI is doing by creating the unlimited window between 2am and 8am.

I am surprised at how people are so forgiving of Teksavvy's price increase. If a big company did this, we'd be screaming.

TSI's prices are about 2/3 to 3/4 of incumbent plans with comparable speeds and about 1/4 to 1/3 of incumbent plans when 100GB - 200GB is used. There is a lot of room for forgiveness there. I have saved about $1600 in monthly costs with TSI and an undetermined amount in overage fees.

[hugh]

Their is no proof of that.

No but simple logic proves it.

It's not as valid for TSI since their overage charges are much more reasonable and their caps are much higher.

That's not what I am talking about.

That is exactly what TSI is doing by creating the unlimited window between 2am and 8am.

No. I am talking about peak premium pricing where the cost in heavy hours is more expensive. Please read my post again.

I have saved about $1600 in monthly costs with TSI and an undetermined amount in overage fees.

How is that relevant to the discussion of a peak pricing model?


Please read my post again, I am discussing the illogical connection between TS pricing plans and what they claim are the issues. How much you saved over the last few years by using TS as a vendor is irrelevant to what I am talking about.

Have Bell and Rogers been making massive profits off consumers in the last few years in Internet? It would certainly appear hence why I have been using TPIA providers for years but that is irrelevant to the argument that TS price plans are illogical if you take what they are saying as gospel.