—— Forwarded Message From: larry.richelhof [at] sasktel.sk [dot] ca
EXPEDIENT PRICING PLAN FOR HIGH-SPEED ACCESS by David S. Isenberg
Wireless carrier E-xpedient Networks filed for bankruptcy last fall. Bawling echoed up the drainpipe long after this baby disappeared, because E-xpedient got one of the most basic pieces of the broadband puzzle right — the pricing model!
E-xpedient was offering 100 megabit per second service in a handful of cities, most recently Miami, when it went under. It would put a pair of bi-directional transceivers on rooftops of tall buildings to create a redundant wireless ring. It was a reliable, cost-effective architecture, and the company was executing well, but it ran into the unavoidable fact that constructing networks and selling connectivity the old-fashioned way precedes revenue growth — just as capital markets were closing.
E-xpedient offered 100 megabit-per-second connectivity for $100 a month! Who in their right mind would say no? But there was a gotcha — for $100 you could only download one gigabyte per month. Theoretically, a customer could suck down their monthly quota in two minutes. But practically speaking, a gigabyte per month per person is a practical, entry-level quota for today’s normal Internet use. It allows for a reasonable amount of email and Web surfing, some streaming audio and maybe even a few mongo downloads.
Furthermore, high-speed connectivity has other advantages besides raw capacity. The $100 plan was always-on, with almost-instantaneous latency, and the option value of full 100-megabit capacity when needed.
E-xpedient’s founder, Brian Andrew, explained to me months ago that this allows users to start within their existing comfort zone, at price points similar to DSL, Cable and even dial-up. Then as entry-level customers’ thruput grew (as we’d expect), they could move into higher-priced tiers. Andrew had hoped to capture 75 or 80% of the offices in a building.
E-xpedient made moving up to a higher tier painless. When customers exceeded their monthly bit budget, they’d get a screen-pop to authorize the next tier via credit card. Sixteen digits and an expiration date later, they’d be back on the air. Go without service until the first of next month, or buy more bits? It’d be a no-brainer.
—— End of Forwarded Message