ISP’s for years have been charging tremendous amounts of money for little reward. Until the past few years we really had not seen reasonable
internet speeds at a national level. However, that has increased the amount we pay per month, however we get more speed in return, but is that truly enough?
Let’s factor in something for a moment. how much do you pay for your internet service?
I pay about $99 a month, and get 130 Mbps, (that loosely translates into 16.25 MB of downstream traffic per second) Basically 40+ Terabytes of data per 30 day cycle. That works out to $0.002 per gig. sounds fair right? Well let’s not jump to any conclusions just yet. Now, there is a catch. At 400 gigs they cap you. (In essence your supposed to stop using the service till your next billing service, or else) So in reality you are getting: approximately 400 gigs. I say that because they count uploads against you as well… So with all that in mind, that changes the dynamic to look more like this: $99 a month/400 gigs of data = $0.25 a gig. Not as good a deal hu?
So let me let you in on a little industry secret. Bandwidth costs about $0.05 gig on average factoring in overhead costs and all.
So the profit margin on this for the provider is about $0.20 or in essence about $70 of your $99 your paying per month. How about that for mark up?
I’m not saying that all these numbers are picture perfect, but they are near the mark for what companies charge and make for internet services. I hope this helps all of you when picking your next internet provider.