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Why are Sky/UPC/Eircom all increasing prices

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Comments

  • #32
    lightspeed
    Registered Users, Registered Users 2 Posts: 1,298 ✭✭✭lightspeed


    But if they are still quite profitable, could they not just bear the burden of increased cost in delivering their tv service which would be offset by customers of Sky coming to UPC as a results of Sky's price increases.

    Yet they decided they would waive this opportunity and increase prices knowing full well that Eircom is growing is gaining market share as it expands eFibre broadband across the country.


  • #33
    dub45
    Moderators, Technology & Internet Moderators Posts: 12,451 Mod ✭✭✭✭dub45


    Johnboy1951 wrote: »
    As far as I can see UPC broadband offerings are dropping in price. UPC have a great deal of control over the costs of providing the broadband service.

    UPC also offer a TV service, and they have little or no control over what they must pay for the content they provide. Their TV service is rising in price.

    These are essentially separate services with different cost bases ...... I fail to grasp why posters seem to be conflating them and implying that because the cost of one is rising so is the other.

    The Irish economic situation has little or no bearing on the cost of the TV service. The most costly parts of the service are from imported content.

    ...... or so it seems to me .....

    If you have a package that is increasing then the price is increasing simple fact. Some UPC packages have increased way out line with inflation according to people posting online and the Irish operation of UPC appears to be quite profitable anyway.
    Fitch considers the cultural similarities of the UK's and Irish Republic's cable markets provide strategic sense for the acquisition, and the strong margin of the Irish business (LTM September 2014 EBITDA margin of 48.3%) is accretive to the enlarged business.


  • #34
    bk
    Moderators, Motoring & Transport Moderators, Technology & Internet Moderators Posts: 23,454 Mod ✭✭✭✭bk


    lightspeed wrote: »
    But if they are still quite profitable, could they not just bear the burden of increased cost in delivering their tv service which would be offset by customers of Sky coming to UPC as a results of Sky's price increases.

    Sure, but what do they do next year when Sky increase their TV prices again? Swallow the price increase again?

    And what about the year after that? Do UPC swallow Sky's TV price increase every year until UPC goes broke?

    That only ends up benefiting Sky by eliminating a competitor! Sky increase their wholesale TV prices almost every year.

    If UPC just swallows the price increases, that means they have less money to invest in their broadband network, which means not as many people get their high speed broadband or new higher speeds. None of which would be good.

    Personally I think it is only fair and right to pass any of Sky's TV price increases onto the people who actually want Sky's TV channels. While those of us who don't want pay TV, get the benefit of ever cheaper and faster broadband.

    You should really be directing your anger at Sky.
    lightspeed wrote: »
    Yet they decided they would waive this opportunity and increase prices knowing full well that Eircom is growing is gaining market share as it expands eFibre broadband across the country.

    Actually UPC has been destroying Eircom in the areas in which UPC are operating. Eircom has lost as many as 50% of their customers in UPC areas!

    While Eircoms eFibre footprint is expanding, that is outside areas which UPC operate, so it makes no differences to UPC.

    Eircom in fact will be extremely worried about the entry of ESB/Vodafone FTTH into the areas they currently have a monopoly on. Eircom could end up losing 50% of these customers to to the ESB FTTH as it is rolled out.


  • #35
    Johnboy1951
    Registered Users, Registered Users 2 Posts: 13,932 ✭✭✭✭Johnboy1951


    lightspeed wrote: »
    But if they are still quite profitable, could they not just bear the burden of increased cost in delivering their tv service which would be offset by customers of Sky coming to UPC as a results of Sky's price increases.

    Yet they decided they would waive this opportunity and increase prices knowing full well that Eircom is growing is gaining market share as it expands eFibre broadband across the country.

    If one part of the business is very profitable, then they have an opportunity to reduce consumer costs for that service .... particularly if they have market competition. That is what appears to be happening with their broadband service.

    If they need to increase prices for their TV service to keep it profitable then that seems reasonable.

    What you propose is that those who only want their broadband service should subsidise those who want their TV service.

    Equitable for the customers? Hardly.


  • #36
    helimachoptor
    Moderators, Science, Health & Environment Moderators Posts: 21,755 Mod ✭✭✭✭helimachoptor


    Upc could start investing in creating their own content so they wouldn't be as dependent on sky..


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  • #37
    Avada
    Closed Accounts Posts: 3,411 ✭✭✭Avada


    You have also got to take into account that Sky have had to add 2% extra VAT onto their TV packages for Irish Customers since January due to the change in EU vat laws. Do you really think they're going to absorb that without increasing prices? The price increases were effectively 3.5% and 5.5% on the original and variety packages respectively, so 2% VAT increase is quite a chunk of that.

    (disclosure: I used to work for Sky, I haven't worked for them in quite a while and have no affiliation with them any longer)


  • #38
    Cuddlesworth
    Registered Users, Registered Users 2 Posts: 14,007 ✭✭✭✭Cuddlesworth


    dub45 wrote: »
    If you have a package that is increasing then the price is increasing simple fact. Some UPC packages have increased way out line with inflation according to people posting online and the Irish operation of UPC appears to be quite profitable anyway.

    Why would they decrease prices, they have no competition? Their lowest package is better than what 95% of Eircom customers can get. And Eircoms VDSL is not a competitor, its dead tech and a waste of resources

    The only way they would increase their prices further is when Fibre to the home is rolled out. And the first place that any reasonable business would target is dense areas outside of UPC control because UPC have their cables laid down, they have their cabs and backhaul in place. They have strong contracts with Tier 1 providers due to their size. Its important to note that DOCSIS 3.0 is actually capable of 1.5gig down and 250mb up, with 3.1 probably capable of doing 10gigs down and 1.5gigs up. So even if you dropped the cables down, UPC would just upgrade their existing backhaul for minimal cost and offer a equivalent service for less.


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