An Attempt at Economically Rational Pricing: Time Warner Trial

Patrick W. Gilmore patrick at ianai.net
Sun Jan 20 03:45:54 UTC 2008


On Jan 19, 2008, at 11:37 AM, Joe Greco wrote:
> Mikael Abrahamsson writes:
>> Customers want control, that's why the prepaid mobile phone where  
>> you get
>> an "account" you have to prepay into, are so popular in some  
>> markets. It
>> also enables people who perhaps otherwise would not be eligable  
>> because of
>> bad credit, to get these kind of services.
>
> However, if you look, all the prepaid plans that I've seen look  
> suspiciously
> like predatory pricing.  The price per minute is substantially  
> higher than
> an equivalent minute on a conventional plan.  Picking on AT&T, for a  
> minute,
> here, look at their monthly GoPhone prepaid plan, $39.99/300  
> anytime, vs
> $39.99/450 minutes for the normal.  If anything, the phone company  
> is not
> extending you any credit, and has actually collected your cash in  
> advance,
> so the prepaid minutes ought to be /cheaper/.

I disagree.  Ever heard of volume discounts?

Picking on at&t again, a typical iPhone user signs up for 24 months @ ~ 
$100/month, _after_ a credit check to prove they are good for it or  
plunking down a hefty deposit.

Compare that $2.4 kilo-bux to the $40-one-time payment by a pre-paid  
user.  Or, to be more far, how about $960 ($40/month for voice only)  
compared to $40 one-time?

Hell yes I expect more minutes per dollar on my long-term contract.


Hrmm, wonder if someone will offer pay-as-you-go broadband @ $XXX (or  
$0.XXX) per gigabyte?

-- 
TTFN,
patrick




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