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Vodafone says fixed broadband capping is a survival measure
From: Ghana|Samuel Nii Narku Dowuona|Adom Business News          Published On: January 3, 2013, 11:45 GMT
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Vodafone says fixed broadband capping is a survival measure
Vodafone Ghana says its previous unlimited fixed broadband packages were threatening to collapse its business so they instituted the capped system as a survival measure.

Head of Consumer Marketing at Vodafone Ghana, Tara Squire told Adom News “at the time we took the decision to give unlimited service at GHC45 we felt it was a good decision and our customers liked it. But there are people sitting on that package and burning up to 38GB a day – there were people who burnt up to 1.5 terabytes a month and paid only GHC45/GHC65.”

He noted that those persons bought the GHC45/GHC65 package meant for home consumers and used it to run internet cafes or to download up to 50 movies a day because the speeds were up to 6megabits/second so they did not see the need to move to higher packages and pay more.

“That is not sustainable and we felt we had to do something about it, and we have done something about it – we are saying that if you want to burn unlimited data pay us a commercial rate – it is a survival decision and this is survival for both Vodafone and for Ghanaians who own 30% shares in this company.”

Some of the Vodafone’s fixed broadband customers have been agitating over the past week against a cap of 15GB for 30 days package, particularly after a price increase from GHC45 to GHC65 for that package.

The company has also introduced 25GB at GHC100 and 60GB at GHC200 for home users, plus GHC180 for unlimited usage for businesses.

According to the customers, Vodafone used to have three unlimited packages at GHC45/GHC70, GHC105 and GHC200, which used to be differentiated by the speeds; so the higher one pays, the better the download speed one got.

The customers explained that those who paid GHC45/GHC70, for instance, got speeds of up to 2megabits/sec and those who paid GHC105 GOT got up to 8megabits/sec and those who paid GHC200 got up to 20megabit/sec.

The customers want that system to be maintained, but Vodafone is now charging based on consumption and not speed.

Vodafone has therefore moved all persons on the GHC70 unlimited package down to the GHC65 capped package, and it is now insisting that all those seeking unlimited 30-day package should pay GHC180.

Tara Squire explained that the company could no longer use speeds to determine how much people paid because that was difficult to do, so it has resorted to consumption as the yardstick, which the consumers are completely against.

He noted that those agitating against the capped system are the few “abusers” who are burnt on buying unlimited package at GHC65 and using it for business and for heavy downloads at the expense of other customers and of Vodafone.

The Vodafone Executive explained that for the majority of Vodafone customers who consume between 7GB to 10GB a month at GHC65, the 15GB cap is more than enough.

He said data consumption analysis indicates that even with 11GB a month, a consumer could send and receive 120 emails without attachments, send or receive 20 emails with attachments, download five movies, browse for 240 hours, send 20 pictures, download 60 songs, stream 20 videos live, listen to internet radio five hours a day, play online game five hours a day, and make online calls for one hour every week.

“So it is obvious that with a cap of 15GB at GHC65 at speeds of up to 6megabits/sec we are even giving our customers the best value on the market,” he said.

Tara Squire also said the unlimited system could no longer continue because on the average, all of Vodafone’s fixed broadband customers pay for only four months in a year and so the company does not make money for up to eight months in a year from fixed broadband, even though it has invested heavily into MSANs to improve quality of service and customer experience.

“If we continue to give unlimited packages at such low prices, then we might have to start doing contracts of at least two years with every customer so that they pay on monthly basis whether they use or not so we can recoup some of our investment. But this is a prepaid service so customers are free to subscribe at will,” he explained.

Meanwhile, Vodafone is meeting with the leadership of some of the groupings of its agitated fixed broadband customers today, Thursday, January 3, 2013.

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