Xtra users are disgruntled by changes to its pricing plans.
As part of changes to its pricing plans announced last week, Xtra has removed from its customers the opportunity to pay for the internet time they use on a strictly proportional basis, with no charge if they don’t use the internet at all for a month. That charging regime used to be known as the NZplan.
The lowest charge now is the Xtra Prepay 2 plan, which has a $5 per month minimum charge for two hours of internet access a month.
However, the next cheapest plan, Xtra Prepay 10, gives 10 hours access for $10, so a lot of users might be expected to go for this $1/hr plan rather than the $2.50/hr of Prepay 2.
Current and former Xtra users commenting in the nz.general newsgroup, mostly negatively, on the changes, suggest a valuable option for the very low-volume user has disappeared. Users with a low volume of email and no other internet activity, and those who use Xtra as a reserve ISP in the event of collapse of service from their primary provider, may find themselves paying $5 a month for little or no usage, the objectors say.
Others, however, accuse them of being “freeloaders”, for whom other users pay.
Though nothing in Xtra is free, there was effectively a cross-subsidy among users, hinted at by communications officer Matt Bostwick, talking to Computerworld. “Everyone who uses Xtra generates billing and account management costs that have to be met,” he says. “The new plans share these costs more fairly.”
Some users are also annoyed that Xtra has raised the price of its flat-rate plan, the Xtra Value Pack, from $24.95 to $27.95 a month. With the cost of a given amount of communications capacity coming down, prices should not rise, they say.
Xtra has also launched a "daytime pack", with a flat rate of $19.95 a month, providing the user avoids the peak hours, between 5pm and 11pm. Time in that slot is charged at $2.50 an hour under the plan.
Xtra lowered the price of the Value Pack from $39.95 to $24.95 in August last year. The need for a price rise is based on increasing numbers of customers, making increasing use of the medium, Bostwick says. Recent statistics show the number of emails almost doubled in the year from August 2000 to August 2001, the number of visits to the email server tripled, and the average size of an email message rose by 60%, from 50KB to 80KB.
Xtra users in the newsgroup are muttering about changing their ISP and asking other users for recommendations (Paradise Net seems to be most recommended), but at the same time, they bemoan the difficulty and expense of changing, which would involve many in redesigning business cards and other material carrying an Xtra email address. Few of those commenting seem to have got around to registering their own private domain names – or can’t afford it.
While there could be a drfit away from Xtra, price competition is not exactly cut-throat among the majors.
Ihug chief Tim Wood notes that his company “made a price correction” in April, raising the cost of its flat-rate connection to $29.95 – but with $5 of free toll-calls per month. “We saw where the market was going then,” he says. “Charges were far too low. Xtra has obviously come to the same conclusion, now it’s out on its own [becoming more independent of parent Telecom] and has to pay its own costs.”
Ihug still runs a service priced strictly according to time online, with no minimum, Wood confirms, though some users get bumped off after three hours' continuous use at peak time.
ClearNet charges $24.95 a month flat rate, and has a time-used tariff with no minimum – the “usage plan”.
Paradise offers dial-up plans with minimum of 20 hours a month for $10 or 250 hours a month for $20.
Both Clear Net and Paradise representatives say those companies have no intention of raising dial-up tariffs in the near future. Clear Net will be extending its network to more small centres in the near future, says spokesman Ralph Little, but he declines to give more details at this stage.