Do Usage Based Pricing Models Make Sense?
from the not-for-the-customer... dept
Here’s an odd opinion piece over at Telephony Online, saying that various service providers (mainly ISPs or wireless carriers) are making a mistake in offering flat-rate services. The guy’s argument is that these service providers are leaving money on the table by not “taxing” users who do more on their networks, and he’s hopeful that they’ll change their policies in the future. This is backwards, short-sighted thinking that leaves out the most important part in this equation: the consumers. Consumers want flat-rate pricing. They don’t want to worry about how many bytes of traffic they’re using (or even what a byte is, in most cases). Putting toll booths and metering systems everywhere (1) discourages use and (2) makes the service much less valuable to end-users. So, while service providers might think they’re getting more since they can track specific usage to revenues, it’s a much riskier move. By lessening the overall value of the system, they risk making less money since customers can’t be convinced to sign up.