ISPs restructuring their pricing plans may be missing opportunities to learn from the past.
Long time Canadian telecom industry watchers will remember Integrated Network Services, Inc. (Insinc), a data services company that was acquired by Sprint Canada in the mid 1990’s. Insinc owned no transmission facilities of its own, yet it won the RFP for the original CA*net in 1989-90, partnering with IBM. Insinc leased facilities from CNCP and Stentor.
As a competitive differentiator, Insinc offered a mean time to repair (MTTR) of only 2 hours and backed it up with credits if a repair took longer. The underlying carriers offered a 4 hour MTTR. How could Insinc offer a better repair time than the carriers? Insinc looked at the data for repair times and they structured their customer agreements leveraging that deepĀ understanding ofĀ the business.
At the time, repair times were actually bi-modal: a lot of repairs were effected by quick resets; most of the rest took much, much longer, requiring field dispatch and possible splicing. In other words, a significant share of the troubles were dealt with in a matter of minutes, while the rest took much longer than 4 hours. So Insinc would miss roughly the same percentage of repairs whether the commitment was 2 hours or 4 hours. By commiting to an MTTR of half the time of their suppliers / competitors, Insinc was able to build up an attractive portfolio of business.
What brought this to mind was a reading of a column last week in the Toronto Star. A customer who apparently uses less than 2GB per month was complaining that she is going to receive less fromĀ her service providerĀ when they change her unlimited internet plan to one with a 25 GB download cap. How is she getting less service?
At the same time, her service provider could have saved itself the publicity had it looked at the usage data in advance. Was there really a need to impose a 25 GB cap on a customer using less than 2 GB?