Eircom drops Wholesale Bitstream DSL Price from €27 to €20.10

spongebob

Thats 25% off .....assuming it is the EXACT same product that is. Press release on the Eircom site Here in the past few minutes.

No news yet on a price drop for existing Eircom customers , instead the cryptic comment quoted below.. The Pending Changes File is still as was all week and so its the Bitstream offer in the wholesale section.

"Based on the new wholesale price, eircom Retail will introduce a range of broadband products starting at EUR 39.99 (including VAT),"

M

MDR

Some simple math says that the UTV product should now wieght in at €32 and the Esat BT product at €36.

silent

Originally posted by MDR
Some simple math says that the UTV product should now wieght in at €32 and the Esat BT product at €36.

that would be great however I think very unlikely
my guess is 37.5E for UTV and 39E for Esat, both with increased caps to 10G (if eircom ups it's to 8G as well)

ideally I'd like a tiered offering, with the same price as it is but speed increase with higher cap, plus a lower priced one for ordinary folks

Urban Weigl

Eircom reduces wholesale price to competitors by just 6.90 euros, and at the same time reduce their retail price by 14.46 euros (inc vat). More margin squeeze, if ever I have seen it.

Ro

http://www.siliconrepublic.com/srep.ic/news.html?storyid=single2680

Eircom cuts wholesale broadband rates by 25pc


12.02.2004 - Eircom this afternoon revealed that it plans to cut the wholesale price of broadband by 25pc from the current monthly rate of €27 for other licensed operators to €20.10 from 1 March.

On the heels of the announcement, the company has introduced a new range of broadband products starting at €39.99 a month. It may be expected that other DSL providers in the Irish market, including UTV Internet and Esat BT, will follow with similar 25pc price cuts.

Making the announcement, Eircom said it is urging other operators to do more to promote broadband as well as revealing its own plans to extend broadband out to smaller communities in Ireland.

Based on the new wholesale price, Eircom Retail will introduce a range of broadband products starting at €39.99, which the company claims will make broadband in Ireland among the cheapest in Europe.

David McRedmond, Eircom’s commercial director, said: “This is about Eircom’s leadership in both the supply of and the demand for broadband in Ireland. Leading on demand means good prices, good marketing and enthusiastic selling. To date Eircom has been the driver. We urge other operators to join in this drive to ensure that Ireland is a broadband leader.

“For Eircom, the sole national provider of broadband in Ireland, leading on supply means extending the roll-out of broadband. Late last year we committed to bringing broadband to every town in Ireland. This week we launched a programme which goes beyond that and extends our broadband roll-out to smaller communities, with populations less that 1,500. This is how we will ensure that Ireland is a broadband leader,” McRedmond added.

spongebob

It seems that both the 256k and the 1Mbit packages that have been rumoured in the trade are gone. Eircom has a sneaky way of keeping its margin and I am not sure how much is inertia selling or whether all customer who pay €54.45 could be transferred onto the higher cap/lower contention package and not told of the amendment to the T&C's . If Eircom do not publish the price of both and the specs for both at the same time then the entire existing customer base will be reverse slammed onto the €39.99 package as there is no alternative. It is alleged that Comreg and Eircom missed 3 deadlines to settle all of this in the past week .

Interesting times.

The latest story I heard about the deal between Comreg and Eircom is that Eircom will have two offerings.

There will be a 48:1 Radsl 512k package witha Cap of 4Gb or less for €39.99

There will be a 24:1 Radsl 512k package with a Cap of 8-10Gb for €54.45

The wholesale price for the cheaper of these has droped to €20.10 while a new price has been struck but not published yet for the other RADSL package.

netman

Originally posted by Urban Weigl
Eircom reduces wholesale price to competitors by just 6.90 euros, and at the same time reduce their retail price by 14.46 euros (inc vat). More margin squeeze, if ever I have seen it.

looks to me like they've both been reduced by about 25%

oscarBravo

Originally posted by netman
looks to me like they've both been reduced by about 25%

Eircom's wholesale price is not the only cost for a reseller; it's one of a number of costs. Assuming (hypothetically) that the bitstream cost is 40% of the reseller's overall costs, then a reduction of 25% in bitstream price is a 10% reduction in the reseller's overall cost.

yellum

Originally posted by Ro
http://www.siliconrepublic.com/srep.ic/news.html?storyid=single2680

Is IOFFL going to comment on this ?

bk

Originally posted by oscarBravo
Eircom's wholesale price is not the only cost for a reseller; it's one of a number of costs. Assuming (hypothetically) that the bitstream cost is 40% of the reseller's overall costs, then a reduction of 25% in bitstream price is a 10% reduction in the reseller's overall cost.

Actually the bitstream cost is more like about 65% of the total cost:

Currently the bitsream cost is e27 (excluding VAT) so, the cost + profit margin of each product excluding VAT and the bitsream charge is:

Eircom = e54.45 = e45.00 (Excl VAT) - e27 = e18.00
IOL BB = e49.49 = e40.90 (Excl VAT) - e27 = e13.90
UTV IP = e47.50 = e39.25 (Excl VAT) - e27 = e12.25

Now with the above info we can calculate the percentage of the total cost (excluding VAT) that bitstream is:

Eircom = e27 / e45.00 = 60%
IOL BB = e27 / e40.90 = 66%
UTV IP = e27 / e39.25 = 68%

As you can see Eircom seems to either have higher other charges or they are making greater profit off it, I'd bet it is the latter.

Now let say for the moment that for each company all other charges and profits remain the same, but we factor in the the cheaper bitstream charge, then we get how much each product would be retail:

Eircom = e18.00 + e20.10 = e38.10 + 21%VAT = e46.10 (Incl VAT)
IOL BB = e13.90 + e20.10 = e34.00 + 21%VAT = e41.14 (Incl VAT)
UTV IP = e12.25 + e20.10 = e32.35 + 21%VAT = e39.15 (Incl VAT)

As you can see Eircom are a lot more then the stated new retail charge of e40, however when you look at it percentage wise we see:

Eircom: e40 (Incl VAT) = e33 (Excl VAT)
e33 - e20.10 = e12.90
e20.10 / e33 = 61%

So you see it should be possible for Esat and UTV to at least match Eircom.

Also you should remember that since last year, bandwidth charges have decreased and it is likely that equipment costs have also decreased, therefore it is likely that the other expenses have also dropped. This is evident from EsatBT's new e65 product which includes Free Local and national calls (worth e25) and BB (worth e40).

It ishould therefore be possible UTV and Esat may be able to reach a price point of e35 - e37 (Incl VAT), probably bundled with their phone service.

e35 (Incl VAT) = e28.93 (Excl VAT)
e28.93 - e20.10 = e8.83
e20.10 / e28.93 = 69%

E8.83 is bit tight, but probably possible when bundled with their phone service.

SkepticOne

It seems that both the 256k and the 1Mbit packages that have been rumoured in the trade are gone.

At least the 256k is gone.
http://www.eircom.ie/bveircom/pdf/adslv1.7.pdf
http://www.eircom.ie/bveircom/pdf/bitstreampricelistv1.4.pdf

eircom Bitstream Sonic IP 2048 256 IP UBR 24:1 (115 euros)
eircom Bitstream Express 1024 256 ATM UBR 24:1 (79 euros)
eircom Bitstream Express IP 1024 256 IP UBR 24:1 (59.60 euros)
eircom Bitstream Swift 512 128 ATM UBR 24:1 (49 euros)
eircom Bitstream Swift IP 512 rate adaptive 128 rate adaptive IP UBR 24:1 (27 euros)
eircom Bitstream Expand IP 512 rate adaptive 128 rate adaptive IP UBR 48:1 (20.10 euros)

It looks like a genuine reduction of the entry level bitstream wholesale price down to 20:10. The 27 price still exists but applies to a 24:1 product. Both are rate adaptive.

Additional IP based services at 2048 and 1024 (24:1) have been added. The earlier ATM products at 1024 and 512k have been reduced in price slightly.

It looks like the removal due to FRIACO of extortionate metered income + the threat of competition from the 3.5 gig licences is having some effect on the monopolist.

It is worth looking at the bitstream connection service prices too. I believe Netsource uses this.

mike65

If UTV can dip to €35 a month I'm signing up. As for the press release and McRedmond my blood pressure is up again!

Nurse the screens! :eek:

Mike.

Moriarty

Following on from SkepticOnes post.. (all prices wholesale and ex. vat)

One-off charges..

• New connections will now cost €60, down from €150.
• Disconections will now cost €60, down from €75.

• Port transfers will cost €60.

• There is no wholesale charge to upgrade your line.
• There is a €15 charge to downgrade your line.

All bitstream adsl services, excluding the 'basic' €20.10 512/128, now have 24:1 contention.

There are now 1mbit and 2mbit bitstream services provided over IP rather than ATM. From my understanding, this should now lead to other ISPs finding it easier to offer these services across the country as they only need to connect into one eircom POP to service all their customers. With the ATM service, they had to connect into each of the regional eircom POPs to provide services there, requiring expensive backhaul back to their NOC.

spongebob

The original ATM products are being left to wither on the vine I see from the Wholesale Pricing PDF

EG

512k ADSL (over ATM) €49
512k RADSL (over IP) €27 or €20.10

Upgrade €0 so there is no penalty for moving.

1024k ADSL (over ATM) €79
1024k ADSL (over IP) €59.60

Eircom have very effectively margin squeezed the ESAT Business ADSL here with the new products over IP being shoved into Wholesale and Retail channels. In the near future there will be only one carrier in Ireland with their 'own' ADSL product .

If I was ESAT I would hit back promptly with ADSL2 and RE-ADSL and the LONG RUMOURED SDSL from their 40 exchanges . That would re-establish their niche as a provider of high quality DSL offerings.

Metro Ethernet ( MPLS) is also imminent , in many of the towns where ESAT have a presence.

M