So I've been talking about the internet usurping all other forms of information transfer for a while now.
We can get our newspaper, our magazines, our television, our telephone... you name it, you can get it from the internet.
But up until now there's been no clear sign as to whether this transformation was a year away, 10 years away or 20 years away from becoming a real revolution (forget evolution, we're talking revolution).
Well, as far as I'm concerned, it is here NOW.
Why do I say this?
For a very simple reason.
Rogers has recently changed its internet package offerings. Up until about a month ago you could get their Extreme Internet Package (15MPS/95GB cap) for $60. That has changed. Now their Extreme Internet Package, still $60, only offers you 80GB cap per month (15GB less than before - or roughly 20% less for the same cost). That means if you want to download another 15GB and reach a 95GB usage rate for a month, you'll pay an extra whopping $22.50 (plus taxes).
And in the interest of full disclosure, existing customers (such as myself) won't suffer this fate. Anyone currently on the 95GB cap will remain on that cap for $60 a month. But new customers will only get 80GB for $60 a month. While I am 'grateful' to Rogers for not treating me the way they do new customers, I have to admit, I suspect that at some point they will pull the rug out from under me nonetheless.
So what exactly is going on?
I'll tell you what is going on (at least my theory / view). Rogers must now realize that its revenue from things like cable and phone are going to erode over time. So how do they keep revenue up? Simple, charge more for the internet.
If you ask me it's a fatally flawed theory. I mean, who ever heard of charging more while offering less? It's like McDonald's saying 'Hey we're selling more hamburgers than before but less fries. So let's jack up the cost of our hamburgers to offset the money we are losing on the fries."
Not wise in my opinion. If people don't like fries anymore, find something else to sell with the hamburger, don't just increase the cost of the burger. All it's going to do is piss customers off and open the door for someone else to sell hamburgers at a reasonable price.
But at the same time, I can understand why Rogers would do what they are doing. If people are becoming more and more dependent on the internet, why not charge them more? And the logic (I'm assuming) would be that the more usage going on, the more servers you need to buy to build out the network that carries all that traffic.
But I don't buy that. Instead of squeezing the customer, carriers should be squeezing the equipment providers and balancing the bottom line by squeezing capex costs.
So as far as I'm concerned the revolution has begun. Rogers sees it and for the time being are going to maximize profits by charging as much as they can for internet access.
I think this is going to drive a TON of customers to ADSL resellers who offer unlimited internet access for as low as $35 bucks a month. But it will probably take folks a year or two before they realize they can get high speed internet for a fraction of the cost that Rogers is charging. People tend to simply keep paying their bills until it gets so outrageous that they get angry and are willing to make a change.
Now, I've always been a huge fan of Rogers customer service. You call up, you get a rep usually within 5 minutes, and they are pleasant and really try to help you.
Unfortunately, I can't say that is the case anymore. I recently had a billing disagreement with Rogers (I won't go in to the details as they are mundane)... but this was my customer experience ...
- First phone call... get a rep, get transfered, wait 20 minutes with super loud blaring music in the phone, decide enough is enough and hang up.
- Second phone call... same as the first time (hang up again)
- Third phone call... same as the first two, although this time I was told it should be a two minute wait, which of course was 20 minutes (so yet again, I hang up)
- fourth phone call (which I made four days later)... get a rep, spend 10 minutes with her, can't help me, transfers me, then spend 30 minutes with another rep who informs me that it's my responsibility to prove that their data usage billing is incorrect. Even though their 'warning system' that informs you when you've reached 100 percent data usage never showed up. Somehow I am psychically suppose to know that I went over such usage limit - it's my responsibility to prove that Rogers counted how much data I used incorrectly (how you are suppose to do that I don't know).
In the end Rogers did the sort-of-right thing and modified the bill slightly, but wow, they sure didn't want to. Basically my experience felt like I was having to defend myself for inquiry as to why I was over billed and being told I went over my usage limit when the system never warned me that had occurred (which it is suppose to do).
The Internet revolution is here... and you know it's here because the carriers are starting to transition towards a pay-per-gigabyte model. So download all you want, but pay through the nose for it. And don't expect any flexibility if there is disagreement over how many gigabytes you used... just pay what you are told you owe!
It's a totally flawed model in my opinion, especially with a new internet-savvy generation of consumers who will switch over to low-cost providers in a heart beat if pushed to the wall.
And here's the irony of it. My rogers email account is sacrosanct to me as I've had it for over 10 years now. But I can see where this is going... the cost of being a Rogers customer is going to keep increasing while what you get in return decreases. So it becomes dangerous for me to continue using my Rogers email account as my primary account, because what if I leave Rogers and people are still emailing my Rogers account?
So now I'll turn to services on the Web for even my email (Rogers' strategy is actually driving me further towards the Web, making me less dependent on them for anything). Google will start becoming my primary account because then no matter what provider I'm with, none of my services are affected. I'm basically 'just' using the service provider as a dumb pipe to the internet and absolutely nothing else.
Anyway, it will be interesting to see how the next few years play out. But don't fool yourself, we were just looking at the pool before, now we are wadding in the shallow end. The revolution is on its way, it's actually here it's just not everyone knows it yet.
And just to wrap things up with a PR perspective... this is going to be one heck of a bumpy ride for PR folks working in the service provider business. I suspect the next few years will see frustration and anger grow from customers, media who start writing stories about alternatives to traditional providers, and an ever increasing difficulty explaining why data cost are going up (when logically they should be going down).
I think the only way to manage what will unfold is to have unprecedented team work between PR, marketing, sales and customer service... for all these essential elements of the business to work together to identify unfolding trends that threaten the business' brand and position in the market.
Although who knows, maybe I'm wrong and your average consumer will continue to pay more and more while getting less and less and will do so with a smile on their face. I think a lot of baby boomers will do so, but I don't think their kids and grand kids will.
We can get our newspaper, our magazines, our television, our telephone... you name it, you can get it from the internet.
But up until now there's been no clear sign as to whether this transformation was a year away, 10 years away or 20 years away from becoming a real revolution (forget evolution, we're talking revolution).
Well, as far as I'm concerned, it is here NOW.
For a very simple reason.
Rogers has recently changed its internet package offerings. Up until about a month ago you could get their Extreme Internet Package (15MPS/95GB cap) for $60. That has changed. Now their Extreme Internet Package, still $60, only offers you 80GB cap per month (15GB less than before - or roughly 20% less for the same cost). That means if you want to download another 15GB and reach a 95GB usage rate for a month, you'll pay an extra whopping $22.50 (plus taxes).
And in the interest of full disclosure, existing customers (such as myself) won't suffer this fate. Anyone currently on the 95GB cap will remain on that cap for $60 a month. But new customers will only get 80GB for $60 a month. While I am 'grateful' to Rogers for not treating me the way they do new customers, I have to admit, I suspect that at some point they will pull the rug out from under me nonetheless.
So what exactly is going on?
I'll tell you what is going on (at least my theory / view). Rogers must now realize that its revenue from things like cable and phone are going to erode over time. So how do they keep revenue up? Simple, charge more for the internet.
If you ask me it's a fatally flawed theory. I mean, who ever heard of charging more while offering less? It's like McDonald's saying 'Hey we're selling more hamburgers than before but less fries. So let's jack up the cost of our hamburgers to offset the money we are losing on the fries."
Not wise in my opinion. If people don't like fries anymore, find something else to sell with the hamburger, don't just increase the cost of the burger. All it's going to do is piss customers off and open the door for someone else to sell hamburgers at a reasonable price.
But at the same time, I can understand why Rogers would do what they are doing. If people are becoming more and more dependent on the internet, why not charge them more? And the logic (I'm assuming) would be that the more usage going on, the more servers you need to buy to build out the network that carries all that traffic.
But I don't buy that. Instead of squeezing the customer, carriers should be squeezing the equipment providers and balancing the bottom line by squeezing capex costs.
So as far as I'm concerned the revolution has begun. Rogers sees it and for the time being are going to maximize profits by charging as much as they can for internet access.
I think this is going to drive a TON of customers to ADSL resellers who offer unlimited internet access for as low as $35 bucks a month. But it will probably take folks a year or two before they realize they can get high speed internet for a fraction of the cost that Rogers is charging. People tend to simply keep paying their bills until it gets so outrageous that they get angry and are willing to make a change.
Now, I've always been a huge fan of Rogers customer service. You call up, you get a rep usually within 5 minutes, and they are pleasant and really try to help you.
Unfortunately, I can't say that is the case anymore. I recently had a billing disagreement with Rogers (I won't go in to the details as they are mundane)... but this was my customer experience ...
- First phone call... get a rep, get transfered, wait 20 minutes with super loud blaring music in the phone, decide enough is enough and hang up.
- Second phone call... same as the first time (hang up again)
- Third phone call... same as the first two, although this time I was told it should be a two minute wait, which of course was 20 minutes (so yet again, I hang up)
- fourth phone call (which I made four days later)... get a rep, spend 10 minutes with her, can't help me, transfers me, then spend 30 minutes with another rep who informs me that it's my responsibility to prove that their data usage billing is incorrect. Even though their 'warning system' that informs you when you've reached 100 percent data usage never showed up. Somehow I am psychically suppose to know that I went over such usage limit - it's my responsibility to prove that Rogers counted how much data I used incorrectly (how you are suppose to do that I don't know).
In the end Rogers did the sort-of-right thing and modified the bill slightly, but wow, they sure didn't want to. Basically my experience felt like I was having to defend myself for inquiry as to why I was over billed and being told I went over my usage limit when the system never warned me that had occurred (which it is suppose to do).
The Internet revolution is here... and you know it's here because the carriers are starting to transition towards a pay-per-gigabyte model. So download all you want, but pay through the nose for it. And don't expect any flexibility if there is disagreement over how many gigabytes you used... just pay what you are told you owe!
It's a totally flawed model in my opinion, especially with a new internet-savvy generation of consumers who will switch over to low-cost providers in a heart beat if pushed to the wall.
And here's the irony of it. My rogers email account is sacrosanct to me as I've had it for over 10 years now. But I can see where this is going... the cost of being a Rogers customer is going to keep increasing while what you get in return decreases. So it becomes dangerous for me to continue using my Rogers email account as my primary account, because what if I leave Rogers and people are still emailing my Rogers account?
So now I'll turn to services on the Web for even my email (Rogers' strategy is actually driving me further towards the Web, making me less dependent on them for anything). Google will start becoming my primary account because then no matter what provider I'm with, none of my services are affected. I'm basically 'just' using the service provider as a dumb pipe to the internet and absolutely nothing else.
Anyway, it will be interesting to see how the next few years play out. But don't fool yourself, we were just looking at the pool before, now we are wadding in the shallow end. The revolution is on its way, it's actually here it's just not everyone knows it yet.
And just to wrap things up with a PR perspective... this is going to be one heck of a bumpy ride for PR folks working in the service provider business. I suspect the next few years will see frustration and anger grow from customers, media who start writing stories about alternatives to traditional providers, and an ever increasing difficulty explaining why data cost are going up (when logically they should be going down).
I think the only way to manage what will unfold is to have unprecedented team work between PR, marketing, sales and customer service... for all these essential elements of the business to work together to identify unfolding trends that threaten the business' brand and position in the market.
Although who knows, maybe I'm wrong and your average consumer will continue to pay more and more while getting less and less and will do so with a smile on their face. I think a lot of baby boomers will do so, but I don't think their kids and grand kids will.
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