Part of our cause here at Quic is being as open and transparent as we can with our services. This can be seen in all we do, from giving you insight into our upcoming maintenance and/or incidents, or our current network traffic volumes on our status page, or with giving you access to your ONT diagnostic testing. We believe that for tech-heads like you, giving you the information you need to troubleshoot and solve any problem is critically important.
Of similar importance with transparency is knowing what makes up the cost of your broadband with Quic. We operate a low-margin business, which we’re able to do by stripping back a lot of the overheads of other ISPs (e.g. call centre costs), which results in great pricing to you.
But what does this look like? Well, let’s dig in.
- By far the largest cost in delivering our services is LFC costs. This is the cost to us of the end fibre between your property and the cabinet/exchange, provided by Chorus, TFF and Enable (amongst others). This comes to a whopping average of 75.55% of the cost of your connection.
- Next up is the cost to transport your data. This is made up of transport costs (i.e. getting your data from the exchange/cabinet back to one of our network PoPs), and IP data costs (made up of IP Transit, peering etc). This is to get your data from our network PoP to anywhere else in the world. This makes up 6.67% and 8.04% respectively, totaling 14.71%.
- Our second-last direct cost is merchant fees. No surprise here and very self-explainatory, this is the cost we incur for processing credit cards. This comes to 3.80%.
- Finally, the cost of running our business. This is our margin on the service, which is a small figure of 5.94%.
We’re thankful to have such a great customer base to be able to make this happen, and operate our business on such a low margin with our self-service approach.
There is just one problem; LFC costs keep increasing! Each year, local fibre companies make a CPI adjustment to their fibre costs, which increases the amount we pay to the LFCs. This year alone, these cost increases range from 3.57% to 5.49%. As you can tell, this plays a massive difference into the pricing we can offer our customers, and is why many providers have been forced to pass on costs to customers this year.
Unfortunately this just isn’t something we can work around, as we need our LFCs in order to provide fibre services to you all. That being said, we’re continually advocating to LFCs to stop or reduce the impact of this practice.
We hope this gives some insight into the “behind the scenes” of how our service pricing is made up. We’ll continue fighting for our customers to reduce our costs where possible, and as always pass these savings along to you all!