ISPreview take a detailed look at the cost of unmetered for ISPs

6Hours per day every month without unmetered (remember some would be during peak hours) could cost you upwards of £1,000 per quarter. So expecting to pay around £70 per year for no cut off 24/7 and ISDN 128 support and then using that service above 6 hours a day is just not workable. Yet still people complain that such a usage, but for £60 a month, would be drastic, true but it's better than £300 or £400 without? Isn't it?

If you use the net like a drunk uses alcohol then you have to expect to pay the price, end of story. The reason the unmetered model has failed so far is because ISPs didn't understand that heavy users (demand) DO EXIST and perhaps now they might finally see that. These people are here and they provide for a good percent of usage, perhaps instead of booting them it's time to offer them an alternative suiting their needs.

ISPreview Freecall

By now everybody knows we (ISPreview) are talking with various companies about doing an unmetered package, be it resold or uniquely purchased. So to really give you a perspective, lets assume ISPreview chooses the bare essentials and chooses to go with an existing ISP.

Now lets just say, as an example, that we want to handle a maximum of 1,000 users and be able to support them on a near 1:1 ratio. For arguments sake lets cut right down to the most basic of costs and say the ISP provides the rest but we have to pay for the ports, just the ports remember. Estimating that 20-25% would use ISDN and the rest modem we invest in 650 ports (prefer 750). Under the old FRIACO that's going to cost £424 * 650 = £275,600 (initial investment).

At this point in time remember that a ratio of 1:2 would be 500 ports to 1,000 users. In order to earn our money back (assuming at least 650 join) we'd have to charge some £35 to £40 per user per month, thus taking nearly a year before braking out of debt.

If we were to do our own DIRECT ISP company that figure would be closer to two years, meaning a small unmetered ISP trying to offer good quality services would be running at a loss for so long that it'd have great potential for collapse.

Summary

After reading that it should be obvious that in order for any ISP to offer workable and sustainable unmetered, they will invariably have to downgrade their offerings or increase costs. Apply the ISPreview Freecall (this is fictitious, our own offering will not be the same) theory to RedHotAnt, who recently claimed 1:9 as their user to modem ratio. That'd mean 111 odd modems to 1,000 people, which is far too high and can be seen from the current state RHA are in.

To sum things up, unmetered access WILL get better, during early 2001 the local loop will be freed up even further and the possibilities of there being a serious price crash in unmetered access is very real. On top of that with the revised FRIACO system going ahead things are looking even better, exactly what cost differences any of these might make is not yet known.

So whom do we blame? BT for failing to provide a more cost effective option, Oftel for not pushing BT enough in that way, ISPs for taking the various offerings and abusing them or consumers for asking too much of so little? The fact is we're all to blame for exactly those reasons, BT do have the primary focus, but they're only responsible in part.

The good news is despite mass media claims, the unmetered industry is growing in strength, you can't say AltaVista has had any real impact because the service never existed in the first place =). The future looks good, but expect things to be unstable until at least X-Mas 2000.

[Print Page | Main Page]