TFN is losing money. For no good reason.
As IS manager, I have little say over business decisions. But I have been paying attention to TFN's income and expenses. Theoretically, our service prices should suffice to cover our bills. I even think that we are priced higher than necessary on some services. The problem is that there has been a continuous decline in the number of active members. This decline isn't industry-wide — other freenets and commercial ISPs are doing alright. It's just that, for years, TFN has neglected membership retention and growth.
An ISP needs a minimum number of users to achieve economies of scale and to recoup its fixed costs. We are now below that minimum. At the same time, we are spending foolishly in some areas.
For starters, we must cut costs until we are living within our means. Before our debt becomes insurmountable! Simultaneously, we must attract more paying members to increase income. That means advertising, and that too has costs. Obviously we have little margin to cut prices now.
Some TFN people worry about "free-loaders". I have looked at the numbers and I am convinced that, currently, the load sustained from non-paying members is insignificant. They use negligible resources and add negligible cost to TFN's bottom line. Yet they are valuable because they provide just as much word of mouth advertising as paying members.
Copyright (C) 2009 Iain Calder. All rights reserved.