During the last year there has been a surge in businesses offering VPN (Virtual Private Network) services to those who prefer to operate with a degree of anonymity on the Internet. A VPN service assigns your PC with a different IP address to your regular one, making it much more difficult for people to identify you on the Internet. A VPN service could also help you access blocked websites or services such as BitTorrent or Skype, and offer security while accessing the Internet via public hotspots.
A good VPN service offering unlimited data transfers and healthy speeds usually costs around $10 to $20 per month, so when a new service launched this week, offering all this for a one-off payment of $29.00 (introductory price), it warranted further investigation.
According to their website, the people behind VPN4Life are entrepreneurs “striving to free the world from ISP monitoring, government restrictions, and capitalism’s growing influence on the Internet, one account at a time.” Offering unlimited bandwidth and 128 bit encryption through servers in the UK, Germany and Singapore with a 99.7% uptime guarantee, it certainly looked attractive. The official site carries little detail, so we contacted VPN4Life and asked a number of questions.
First of all, the $29.00 payment looked like an introductory offer, so how much would the service cost normally? VPN4Life told us the 20mb/sec fully BitTorrent compatible unlimited bandwdith PPTP service would cost “between $45 and $50″, while confirming that the payment is indeed a one-off for a lifetime subscription.
$50.00 for life sounds an amazing offer – but is this super-low price sustainable? The immediate difficulty with a lifetime subscription is that once off the ground, the company is then responsible for providing a service to thousands of members forever who paid very little in the first place. More and more new signups are then required to pay for the spiraling hardware and bandwidth costs and since VPN4Life offer unlimited bandwidth, it’s difficult to see how the whole operation can be sustained.
As far as the real costs of bandwidth go, we spoke with Bruce at VPN provider Perfect Privacy who told us: “There is a reason why we currently charge about EUR 10.00 to EUR 15.00/month (depending if you pay for 3 or 24 months in advance), namely that 1 mbps of dedicated bandwidth in the West costs about EUR 10.00 to US$ 15.00 at the very minimum. In Asia it costs about US$ 80.00/mbps. That’s US$ 1,500 (U.S/Europe) to US$ 8,000 (Asia) every month just for 100 mbps.”
In the face of these figures, the VPN4Life offer starts to look vulnerable indeed. “How are they going to pay for their ever increasing bandwidth needs if the number of paying members becomes ever smaller in relation to the total number of members?” asked Bruce, rhetorically. He has a very, very good point. It looks impossible, much like the classic pyramid scheme.
Some might feel that at $50.00 this service is worth a try but I strongly believe that if something looks too good to be true, then it probably is. Time will tell, but I won’t be changing provider, that’s certain.
Update: Important – Anyone considering purchasing should read here first