Memoirs of a Roadie

This week, 27th-30th September, BT and Intel are teaming up to promote wireless broadband coverage in Birmingham for Liberate Birmingham. There seems to be a big promotion going on with lots of giveaways and prizes, but it's really a basic marketing ploy to get you to sign up to their services. During the promotion they are advertising that you'll get one day free wifi access, but if you read the website, that's part of the standard package when you sign up at any time.

I might have been more excited about it had it been permanently free not just one day, which many other countries are moving towards, or at least a low charge (£10 per month for 4 hours access is quite steep considering that Virgin Media Broadband (Telewest as was) charge £25 per month for a 4MB unlimited link). I can understand that the initial outlay has possibly been quite significant, but charging ridculous prices is not going to get you that many long term users.

I've often wonder why some of these companies don't learn basic economics. Understanding supply and demand isn't difficult, but it would seem that people like BT are being swayed more by the numbers of their capacity, thus scared of the uptake and maybe frightened that if everybody signed up they would be so overwhelmed with the bandwidth that their network would overload and shutdown. Charging a high price for very little doesn't get you much demand, so you never reach your capacity limits.

However, charging £10 for perhaps 30 hours (roughly 1 hour per day), would seem like a much better deal for everyone. The customer thinks they getting a good deal, and the provider is getting a decent demand for the service and more importantly long term demand, because people will be more willing to stay signed up for quite some time. For that kind of deal I'd sign up, in fact I'd probably sign up for a year. But how much usage would I actually get out of it? At the moment I don't spend a lot of time in Birmingham City Centre, but when I do, had I signed up I would probably be getting to use maybe 8 hours of usage total for the month. Despite the fact I never used the other 52 hours worth, I would still feel like I got a good deal, because I would know that if ever I needed the access when I was in the city centre, it would be there. If I worked in Birmingham, I could possibly use maybe upto 20 hours just sitting waiting for my bus (longest I've waited for a 63 is two hours!).

It's all about perception. It's how banks work. The perception is that a bank will always give you your money whenever you need it, and in virtually all instances that happens. The reason being that your local bank contains enough money to pay out a reasonable amount to any customer who wanted it. If with the case of Northern Rock recently, customers suddenly flood the tellers with requests, then the reserves run out fast and those unable to get their money out panic and demand suddenly escalates. Thankfully this rarely happens.

With BT's wireless service, if they had a signup of the service for 100 users, when they know they could only cope with 80 users, the chances of all those 100 users accessing the service all at the same time is unlikely. Possible, but unlikely. Maybe when an international disaster hits there might be a flood of people trying to get access, but no-one would find it totally unexpected to struggle to get a connection at those times. During regular daily usage I would expect maybe only 40-50% of users would be using the service at peak periods (probably home time). Most people are only likely to use the service in the evening or weekends, when they're out at the pub (possibly on a quiz night) or wandering around the shops. With the increased usage of the wireless mobile phone, potentially the usage could be a little higher, but in most cases people are using their work connection on their desktop or laptop, or they're at home. I would be extremely surprised to see all the access points at 100% for connections and CPU usage at any point of the day or week.

I find it sad that UK business is still greedy to make as much money as possible out of their customers. I'm not against anyone making money from this sort of service, but I am against them making it sound like a good deal, then actually offering you very little in return. Signing you up only to find you use up your monthly allowance in the space of a few days, is not likely to get you many long term customers. With the government moving to speed up the rollout of high octane fuelled 100MBps broadband across the country, it would be nice to see some of those plans to also include the provision for cheaper wireless network services. The UK is falling behind many others around the world, and it's increasingly embarrassing to explain to non-UK geeks why you're so excited to sit in a pub and have FREE wireless access!