Dienstag
Mai272003
WiFi vs. GPRS
27.Mai.2003 | 17:55
Heiko made a very interesting observation during the BlogTalk-Conference in Vienna last weekend:
Heikos gut feeling that it may have to do something with pricing is probably not to far off, I guess. Take the situation here in Germany for example: by and large, I am a satisfied customer of O2. But when I connect to the Internet via GRPS I have to pay 5,12 Euro per megabyte ! Compare this to the 0,012 Euro per megabyte everyone usually pays for DSL-access and you discover a nice little markup of just about 43.000% (yes: forty three thousand percent) !? And the fact, that the bandwidth is lousy compared to DSL doesn't make this offer much better - although it helps no going broke while using it.
It's okay to use this kind of pricing, when you introduce a new service like GPRS, because that's the way this game is played: you try to get as much money as possible from the Early Adopters. But the problem with Early Adopters is, they don't like to get screwed ! And they know when somebody is trying !!
But what would happen, if O2 would lower the price to, let's say, 0,05 Euro per megabyte - still nearly 5 times higher than DSL ? I am pretty sure, GPRS would then quickly become part of the wireless-internet-mania, revenues would go through the roof and all this without much additional investment, except for boosting capacity as usage explodes...
But why aren't they doing it ?
When the WLAN crashed during the event, did anyone of the livebloggers turn to their phones and dialed up via infrared modem? Of course not. If you read this and work for a wireless network operator, you should be concerned.Good Point ! The whole WiFi frenzy has clearly shown that there is strong demand for wireless internet access. But the most widely available infrastructure for this, GPRS, is still far from being popular. Why ?
There you have a crowd of 150 well-equipped gadget freaks and Internet addicts in Western Europe and none of them even considers to convert to data-traffic for as long as the next WLAN hotspot is not too far away and their lives don't depend on connectivity. Why is that? Is it because one hour of data traffic via your network still costs more than the air fare to Vienna?
Heikos gut feeling that it may have to do something with pricing is probably not to far off, I guess. Take the situation here in Germany for example: by and large, I am a satisfied customer of O2. But when I connect to the Internet via GRPS I have to pay 5,12 Euro per megabyte ! Compare this to the 0,012 Euro per megabyte everyone usually pays for DSL-access and you discover a nice little markup of just about 43.000% (yes: forty three thousand percent) !? And the fact, that the bandwidth is lousy compared to DSL doesn't make this offer much better - although it helps no going broke while using it.
It's okay to use this kind of pricing, when you introduce a new service like GPRS, because that's the way this game is played: you try to get as much money as possible from the Early Adopters. But the problem with Early Adopters is, they don't like to get screwed ! And they know when somebody is trying !!
But what would happen, if O2 would lower the price to, let's say, 0,05 Euro per megabyte - still nearly 5 times higher than DSL ? I am pretty sure, GPRS would then quickly become part of the wireless-internet-mania, revenues would go through the roof and all this without much additional investment, except for boosting capacity as usage explodes...
But why aren't they doing it ?
Reader Comments (2)
Bjoern,
One of the biggest issues for the telcos is billing. They have yet to pick up the task of billing packets, something which is 1000-fold more complex than billing minutes.
So while network equipment is decreasing in cost (read pc-based wifi), costs for provisioning and billing systems are exploding.
/n
Dear Friend
In India GPRS Internet Is very cheep When Compared to the Broadband coz we need to pay 25o RS for Broadband ADSL connection of BSNL and 1Rs Per MB after your Free 400mb package but in case of Airtel GPRS we only Need tp pay 250 Rs per Month for unlimited Internet connection and tough the speed is just 150 kbps
George
mail to georgeijk@gmail.com