iBurst's new packages and migration fees

[duncan drennan]

iBurst recently introduced new packages, which offer a much better value than the previous packages.

Now there are three interesting things about this.

1) Customers have not been informed about the packages. I have not received any notification about them, and heard about it via mybroadband. From looking around there, it does not seem that anyone has been directly informed by iBurst. You have to fill in a migration form to be changed from the old packages (even though they have fallen away completely)

2) They have introduced a new pay-per-usage policy which is the default on new packages, and migrations. What this means is that you will not be capped/throttled, but will pay a fixed rate of 95c/MB when going over your cap. This is similar to the cell phone package deals, but is different from how things were handled in the past. It is possible to opt-out of this policy and have the "normal" throttled/capped service.

3) (and this is the clincher) A lot of the packages are now cheaper than before and offer more value. e.g. I am currently on a "Pro Intro" which gives me 1.5GB for R469 per month. The new package is called "Pro" and would give me 3GB for R449 per month. Wonderful! Here is the catch (which I am still trying to confirm)....

According to the migration form, this would classify as a downward migration as the monetary value of the package is lower. On a month-to-month package a downward migration attracts a fee of R199. On a 24 month contract it is the price difference multiplied by three, with a minimum of R199.

So what do you think of this? Is it just a clever way to inject some cash into the company, or a valid attempt to provide a better service?

It is certainly not a big fee to pay, but it totally takes the excitement out of the better value.

Here are the T&C from the migration form:

1. A downward migration is defined as moving to a package with a lesser subscription value (i.e. lesser monthly billing).
2. An Upward migration is defined as moving to a package with a higher subscription value (i.e. higher monthly billing).
3. Downward migrations on Month-2-month contracts are subject to a once off administration fee of R199 (incl VAT).
4. Downward migrations on 24 month contracts subject to a once off administration fee of the difference between the price in the old package and
the new package multiplied by three. Where this cost is less than R199 a R199 fee will be levied.
5. A migration instruction will be acted upon when this signed migration form has been received by iBurst, either a fax sent to
086 503 9111 or an email attachment sent to info@iburstgroup.co.za or handed in to your local iBurst office.
6. A Migration instruction received before the 20th of the month will become effective on the 1st of the following month. Requests received after
the 20th will be effected on the first of the month thereafter.
7. An upward migration request may result in a once off pro rata payment for the difference between the current and new package option selected.
8. Data carryover on downward migration will be limited to the bundled data amount of the lower package
9. Migrations are subject to approval by iBurst.
10. A subscriber may only migrate if their existing account is not in arrears.
11. All Migration requests will result in Pay Per Use being activated on the contract, where additional data used above the monthly allocation will be
billed. Pay-per-use requests are subject to credit vetting.
12. iBurst reserves the right to vary the administration fees from time to time.

[Dave A]

If you are on a month-2-month now, taking a two year contract should be seen as an upgrade.

I somehow doubt the migration fee is a move to raise capital. The owner is rather well heeled

What is interesting to me is that when Vodacom dropped their package rates on 3g, existing clients were automatically charged the new lower rates. But then the usage terms didn't change so maybe that was simpler to execute.

[SilverNodashi]

This looks like Vodacom's negative influence!

95c per MB, what a joke! That means if you go 1GB over, you pay R972.80 (1024 * 0.95)!! I don't know, but that's almost daylight robbery. On ADSL, I only pay 12c per MB after my cap, which is R122 per GB - still affordable. The thing is, since it's not capped, about 70% of their users will go over their initial cap, and still continue as per normal, only to find out at the end of the month what a "killer deal" this is

[duncan drennan]

I've had it confirmed by iBurst now. The migration fee is payable in these cases. It is silly and trivial, and breaks down the goodwill they created by introducing better packages.

Why not choose to be better than your competitors?

[SilverNodashi]

I've had it confirmed by iBurst now. The migration fee is payable in these cases. It is silly and trivial, and breaks down the goodwill they created by introducing better packages.

Why not choose to be better than your competitors?

Probably because there is no competition for iBurst! For many people, iBurst is the only option available. ADSL is much cheaper, and everyone knows it, but telkom doesn't / can't offer ADSL everywhere, and that's where iBurst put their foot in the door. The cellular internet options aren't as widely uses / known as iBurst when it comes to wireless internet.

[duncan drennan]

ADSL is much cheaper, and everyone knows it, but telkom doesn't / can't offer ADSL everywhere, and that's where iBurst put their foot in the door.

I still haven't figured out how ADSL is cheaper. How exactly do you get to that conclusion?

[SilverNodashi]

Simple, I pay 12c per MB on ADSL, as opposed to 95c per MB on iBurst.

1GB ADSL = R75
1.2GB iBurst = R369 - this is the Extreme package


3.5GB ADSL = R240
3.5GB iBurst = R599

P.S. We sell both iBurst, 3G & ADSL, and ADSL is the cheapest, 3G the most expensive

[duncan drennan]

3.5GB ADSL = R240
3.5GB iBurst = R599

Just one thing that you are missing and that is the ADSL line fee. The ADSL price you have quoted is only the data price. The ADSL line fee is R326pm (for 512kbps), which means,

ADSL = R326 + R240 = R566
iBurst = R599

Not such a big price difference after all.

If you take the new packages, then iBurst is R449 for 3GB, which is cheaper than ADSL.

[SilverNodashi]

Just one thing that you are missing and that is the ADSL line fee. The ADSL price you have quoted is only the data price. The ADSL line fee is R326pm (for 512kbps), which means,

ADSL = R326 + R240 = R566
iBurst = R599

Not such a big price difference after all.

If you take the new packages, then iBurst is R449 for 3GB, which is cheaper than ADSL.

Yes, but that logic doesn't quite count. As a business, you need phones, so you have to pay the rent of the line in anycase.
Our DSL rental is R133.33 pm. The line rental is 98.16 - but I don't count this in, since we need the phone.

But, let's take this same scenario on 10GB traffic per month. An office with 5 staff easily use 5 - 6 GB per month

10GB ADSL = R570 + R240 (as per dsd ) = R810
iBurst 9.5GB (that's their biggest package) = R1099

[Dave A]

I need to check our bundled rate with Telkom ADSL, but I seem to recall 3GB on DoBroadband 3 with the line rental and ADSL fee comes to about R550.00 and that's at (up to) 4Mbps speed.

doBroadband 1 which gets you 1GB is only R199.00 - including all the line costs and 384kbps speed.

From there, all you need is top-ups.