A few foundations for the benefit of anybody who isn’t intimately acquainted with this aspect of the telecoms industry…
- TalkTalk has a “retail” division, and also a “wholesale division” called “TalkTalk Business”. I will refer to them as TTR and TTB.
- TTR sells to home users; broadband, phone services etc.
- TTB sells to other ISPs, mostly in the form of “DSL tails” (the actual connection from the exchange to the customer) and separately charges for bandwidth usage across those tails, usually on a basis called “95th percentile charging”. This is a type of averaging which gives a number of megabits of usage, which are then charged at several tens of pounds per megabit per month.
Today, TTR has announced that they want other ISPs to implement a “ban” on capped connections; in other words, they are belittling and attempting to shame their competitors who do not offer “unlimited” tariffs.
Obviously someone in their marketing department has forgotten that a large chunk of their business is SELLING WHOLESALE on a very much *not* unlimited basis to their ISP customers.
Ready, Aim (at foot), Fire.
ISPreview picked this up this morning. I initially expressed my dismay by tweeting :
And then possibly still a little more sarcastically :
I called our account manager at TTB and said that since TalkTalk were now making it their business to try to shame their own customers into offering unlimited, I expected there would be a massive price drop (presumably to zero?) on our 95th percentile bandwidth. He was sympathetic to my viewpoint and reaffirmed that Retail and Business were very separate businesses.
I also noted some quite amazing failures of comprehension in the article itself, including the suggestion that broadband was now a utility like water and electricity, and therefore should be sold without a cap. Speaking personally, I do actually have to pay more if I use more electricity, and if you have a water meter, then this will be true of water as well. Another sarcastic tweet :
Ultimately what I think what they are cack-handedly trying to do is to paint other ISPs who don’t offer “unlimited” as the dishonest ones. I reject this idea utterly; indeed the exact opposite might be successfully argued.
Some ISPs offering home users (for example) 10GB of usage, may well do so expecting to receive masses of extra “unplanned” income in over-usage charges, and that may well be legitimately considered to be underhanded or dishonest.
But for an ISP such as us (full disclosure: I work for AAISP), offering a typical home user on our “Home::1” package 100GB a month of usage, we based that usage on our own customer average (later confirmed by Ofcom). The vast majority of our Home::1 customers do not need to buy topups, or pre-buy at a higher than basic rate. This is testament to the fact that although not “unlimited”, our package offers customers more than enough for their needs, in a vast majority of cases.
Finally, because we actually have enough backhaul bandwidth, when customers want to max out their connections, they can do so without hitting congestion. Our connections, any time of the day or night, do not slow down. Really. Honestly. If we offered a generally “unlimited” service, I am very confident this would not be the case.
Indeed, one of the early comments on the ISPreview post seems to confirm my line of thinking on this :
Put simply, if you buy anything on a “metered” basis, you cannot really, honestly, sell it on an “unmetered” basis. Sooner or later, you will end up with a diminished service at the sales end if all your customers try and eat as much as they can. This is as true for broadband as it is for food at an all-you-can-eat buffet.
Obviously I’ve moved onto the whys and wherefores of limited -vs- so-called “unlimited” services, which takes me away from the purpose of me blogging this, which was mainly to express dismay that a single company could be so unpolitik and so unaware of its own business in a holistic way, that it could make such a stupid, ill-thought-out press statement in public.
Congratulations TalkTalk, the marketing department of your retail section just did a massive shit on many of the customers your wholesale account managers work so hard to cultivate. The only way this could now be made right would be for TTB to reduce its 95th percentile bandwidth charges steeply, preferably to zero.