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>Similarly, I saw a corporation "lock in" a sweet discount for the WAN network provider for 7 years where they got an upgrade from 1 Mbps to 2 Mbps and a discou
by protocolture 1y ago
>Similarly, I saw a corporation "lock in" a sweet discount for the WAN network provider for 7 years where they got an upgrade from 1 Mbps to 2 Mbps and a discount of 40%. At the same time, residential broadband was already 25 Mbps minimum and business-grade fibre had three-digit Mbps speeds within months. The sales rep that got that deal signed probably laughed his ass off.
Its actually one of the least bad ISP business models. Its fantastic for capacity planning. I worked for an ISP that got a lot of businesses signed up on 700 buck per month EOC services, 4-5 year terms, before the NBN rolled out and provided 20 times the bandwidth for 50 bucks.
Thing is, when the NBN passed those customers, they would reach out and try and move them sideways. Extend the contract for 2 years, drop 700 bucks down to 400 and bundle in voice and managed router services. Add in fixed wireless for backup. Offer them 100M business fibre for a transition up to 1k/ month.
An ISP that can do this can afford service techs, upgrades, more peering and transit. It can breathe. Trying to sell a 40 dollar TC-4 NBN service for 42 dollars is a losing proposition. The customer feels good when they get a good deal but they lose out when the ISP starts downsizing or crawling back costly transit. And if its month to month, the constant churn is crazy.