I have long had a concern with the practice that I refer to as “jewellery store pricing”. This is the practice of advertising goods as being on sale by specifying a discount to a price that never applies. The example is diamond rings at sale of 30-50% off - but they seem to always be at that discount, never the "real" price.
The use of “capped” in mobile services I think has been a classic case of this – quoting that a $50 capped plan has $200 of included “value” where that value is specified as the rate charged for excess calls over the plan amount and is not an otherwise observable price.
Optus seems to have taken this to an absurd level. Their new pricing plans contains the usual structure of a monthly fee and a matching data limit. They have moved on from charging for excess usage and sell extra capacity in "data blocks". They specify an off-peak and peak rate as $0.04/MB and $0.08/MB respectively.
These data rates are then used to say that, for example, a customer of their $20/2GB plan can get "up to $80 value" and this is interpreted to mean that the customer can choose a combination of usage up to $80 - at the extremes they would get 2GB if all use was at off-peak times and only 1GB if all use is at peak times.
The really fascinating thing is that having moved to add-on data blocks there is no longer a real rate that is charged for "excess usage". But the prices charged for the add on data blocks are at an effective rate of 1c off-peak and 2c peak.
And here's the rub - if Optus were to say that the data rates were 1c/2c rather than 4c/8c per MB then their $20 plan would only generate an "up to" value of ... $20. When one recognises that really the plan is $20 for 1GB it is fascinating how much publicity Optus has generated despite having the dearest mobile broadband entry level plan in the market.
I may, of course, be wrong. There might be some aspect of this plan that I don't understand. I'd be grateful if anyone could explain to me what the significance of the 4c/8c per MB prices are other than to generate extravagant "up to" claims that would not be made? Shouldn't they be using 1c/2c?
(Note the argument is slightly different in relation to the higher value plans - the comparison is below;
Plan rate 20, 30, 50, 80,100
Advert Value 80,240,560,720,800
"Real value" 20, 60,140,180,200)