Price changes - Going down :)

If you haven't seen it...

https://www.aa.net.uk/etc/news/2019-06-17-improved-p...

I confess that I am a little disappointed that AAISP hasn�t done anything for those on their cheapest package. Even allowing 100% carry forward of unused data would have been a nice �we appreciate your custom� gesture.

In broad terms there is a fixed cost per customer, then add the variable cost of the amount of data they consume. You then need to add a profit margin.

Those on the lowest tariff, as I was, would be only marginally profitable if they approached the 200GB allowance. Maybe even loss-making. As I rarely exceeded 60GB per month they no doubt made a decent but not huge profit from me.

Over time the wholesale costs of usage are reducing. Similarly over time the fixed costs rise, such as building rents and rates and staff pay for every member of the company. The skills of AAISP support answering the phone cost a lot more than those of BT call centre staff.

The higher up the usage scale you go the more effect cost reductions have and the smaller the proportion of the (rising) fixed costs. (That fixed costs can rise is not a contradiction - to an economist fixed costs are the unavoidable ones to run the company for a given number of customers).

The result of that, as fixed costs per customer rise and variable costs fall, is that there is more scope to reduce the price to high users than there is to reduce it for low users.

I accept the point that you are making; however, it could be argued that customers on the 200GB allowance are paying for 200GB. Some months, I have to constrain my streaming whereas on other months I am left with some headroom. Given that customers on the 300GB product have seen almost a 7 fold increase in data for no extra cost, a simple 100% rollover for the 200GB product would cost AAISP peanuts. The cynic in me makes me think that this is a clever marketing ploy to get 200GB users on to a 2TB package with an extra £10 a month to AAISP. I appreciate that AAISP is not an ISP that follows the pack; however, the differences in price and usage limits between AAISP and some of the other top ISPs is becoming stark.

We do appreciate that the Home::1 200G hasn't changed this time, this has been pointed out by a few other customers too. We will bear this in mind when we review the options again though.

Customers on 300GB have gone up to the 2TB because the price of the 2TB service dropped to be the same cost as original 300GB and so it didn't make sense to have the 300GB option any more.

It does make it cheaper to change from 200GB to 2TB though.

As always, we do take on feedback from customers - thank you for posting.

Edited by andrewhearn (Wed 19-Jun-19 14:06:08)

Thank you for responding publicly. Having looked back at AK�s past blogs it is perhaps rather sad that having engaged particularly well with your customers in the past (Aug 17) about future package changes, that these tariff changes seem to have been introduced with no end user consultation. (More Theresa May than Rory Stewart.) That, of course, is AAISP�s commercial right but some of the changes do seem to run counter to what was posted in the Blog 2 years ago.

Be that as it may. As a home user, I am though left with a simple dilemma which is whether a 2TB tariff from AAISP is worth £20 a month more in terms of better support etc than an unlimited usage tariff from another premium ISP? I appreciate that this is only a choice that I can make. What the changes have done is encourage me to look at other ISP offers.

Edited by lexden16 (Wed 19-Jun-19 14:58:28)

Don't forget that your post implies you would rapidly build up at least 1.5TB carry-over as well.

Edited by RobertoS (Wed 19-Jun-19 17:56:55)

You are of course correct. By playing tunes with the monthly contract, then it is also possible to effectively double the 200GB download allowance for £3.33 per month (that is, £10 every 3 months). This was a plus factor in my decision to switch to AAISP. My list of �pros� and �cons� gets longer.

I wasn't meaning that (allowed) trick.

You said you just about stay in the 200GB. If you went up to 2TB for an extra £10, even if you immediately started using 500GB you would rapidly reach the point where your rollover amount exceeded 1.5TB. As I (proportionately) did on 200GB, ending up on month-starts of 360GB or so.

In reply to a post by lexden16:

... a simple 100% rollover for the 200GB product would cost AAISP peanuts.

I think the reason for the 50% rollover is that it gives an absolute cap of twice your contracted allowance. For example on the 200GB package it's impossible for the rollover to build up to more than 400GB, therefore they know that you can never use more that 400 in any month.