What do we do in a time of economic downturn when we've just issued a profit warning and seen our stock price drop by 20%?
Well, if we're a monopoly and the watchdog which is supposed to regulate us is notoriously toothless, then we can just put our prices up exorbitantly, right?
I saw this on Andrews and Arnold's status feed today...
BT announce massive price increases
"BT have just announced price changes that look set to increase our costs by well over £100K p.a. In the past we have always been quick to pass on changes in our costs as changes in prices to our customers.
"These price increases relate specifically to the "old" central links and 20th Century end user connections, which BT are making us keep until something like next August because they don't have their new IPStream Connect product ready in a way we can use yet. They seem to have created a huge delay and then put prices up to profit from that delay.
"We are very reluctant to put prices up at this stage, obviously, at a time when we are trying to reduce prices. We need to fully assess the timings and how they impact us in real terms over the next 12 month to decide if any changes are necessary. At this stage we are not announcing any change in price."
The massive price increases (23% or so) are on the BT "Central" pipes which provide the connection between the BT network and the ISP, for subscribers still on the old "20CN" network — which is most of us, because BT are so far behind with the 21CN rollout.
The price hike is exacerbated — almost doubled for some ISPs — by details in the small print, where they drop an existing per-line "rebate" on connections in high density areas.
The thing is, the ISPs don't even want the Centrals any more. With the long-anticipated "21st Century Network", the ISP just gets L2TP over GigE.
BT's long-promised IPstream Connect will eventually mean that lines connected to exchanges which haven't yet been upgraded to 21CN will also be connected to the ISP via the same type of GigE links, and the BT Centrals can be retired. But although the BT link given there says "Installed Base Migration completed - 31st December 2008", the current estimate is that it won't be available until at least August 2009.
So BT are pumping up the price on the service which they were supposed to have phased out by the end of the year, but haven't. And ISPs have no real choice but to pay up.
It's even better than that, in fact — because of the long delays on IPstream Connect, BT started offering new Centrals at a reduced installation cost, about a month ago. Any ISP who took them up on that offer is probably regretting it now.
Thanks, BT. And thanks in advance to Ofcom, for doing bugger all about it.