Unlimited mobile data plans 'not sustainable'

Summary:Unlimited mobile data usage no longer a viable business model, and bundled data a "fair" way of distributing data access as well as ease spectrum congestion, analysts say.

It is inevitable that telcos are moving away from offering unlimited mobile data usage as the surge in data traffic is putting a strain on the limited radio spectrum, analysts said.

Commenting on Singapore telco M1's launch of new mobile data plans which no longer include unlimited data, Canalys' principal analyst Daryl Chiam noted it is no longer sustainable to offer unlimited access as "that is a very costly way of selling spectrum".

He told ZDNet Asia in a phone interview that the new plans were not a "surprise", as many telcos globally have already made the switch, including Verizon and AT&T in the United States.

Chiam added that the move away from unlimited data plans will not affect many subscribers, as most smartphone users still consume very little data. According to him, most "don't download more than 5 GB (gigabytes)" per month.

Telco's move away from unlimited data plans should also come as good news to mobile broadband subscribers as they will no longer need to "subsidize heavy data users", he pointed out.

That said, telcos will have to step up communications with subscribers to enable them to keep track of the amount of data they consume, and not push out too many plans to avoid confusion, said Chiam.

Krishna Baidya, industry manager for Frost and Sullivan's ICT practice in the Asia-Pacific region, noted that revoking unlimited data usage can be a way for telcos to ease congestion on the spectrum, while still providing good call and broadband quality to subscribers. He did not see think operators are resorting this to better monetize data from users.

Like Chiam, Baidya said the percentage of heavy data users is very small, with most consumers opting for lower-end data plans. Even though there is a cap to excess data usage, he said consumers will still be cautious and stick to their allocated amount of bundled data, he told ZDNet Asia over the phone.

M1's four new mobile data plans starting Thursday range from 5 GB to 50 GB usage. Consumers will have to fork out between S$12 (US$10) and S$40 (US$33) for three of the plans, with theoretical download speeds of up to 7.2 Mbps (megabits per second). An "extreme" 50 GB plan with 21 Mbps theoretical download speed is also available at S$59.

M1 also followed in the footsteps of SingTel to reveal the average download speeds, in the range of 0.6 to 4.8 Mbps for the first three plans and 0.7 to 6.7 Mbps for the premium plan.

SingTel also does not offer unlimited data plans.

P. Subramaniam, M1's chief marketing officer, said the new plans "are designed to allow customers to pay for what they need".

Previously, M1 offered five unlimited data plans, ranging between S$15.69 for a 1 Mbps plan and S$59.40 for a 21 Mbps plan.

Current subscribers can continue to enjoy unlimited data access, the telco confirmed.

StarHub, which is now the only telco in Singapore to offer unlimited mobile data plans, said the rising global popularity of smartphones and tablets is changing the way data is being priced.

Joanna Chan, vice president of personal solutions, commented: "Singapore operators may have to review current pricing plans and consider introducing usage-based data pricing to ensure that network quality for their customers remains optimal.

Customer reaction mixed
Some smartphone users welcomed the move by M1, stating their case for "fair usage".

M1 subscriber Ryan Tan told ZDNet Asia he does not want to "subsidize" heavy data users, and is glad that he can benefit from the reduced rates.

Kelvin Chow, also a low data plan subscriber, said unlimited plans "should not [have] come into the picture in the first place".

"I think it is rather fair for telcos to do away with their unlimited plans...for their respective network to be competitive and bandwidth to be efficiently distributed," the trader said. "It might be a better solution for both as consumers will pay lower fees, and telcos can segregate users into different spectrums, and maybe create dedicated channels."

Timothy Yang, a writer, disagreed.

"I think that it's a step backward for the telcos as data is now the new revenue driver. People will turn to other means of accessing the Internet on the devices, such as Wi-Fi," he argued.

"I think there is no valid reason why the telcos should take away unlimited data. If [there's] congestion in their networks...it's not my problem--it just shows that the telcos have not done enough to ensure that their capacity matches demand."

Topics: Networking, Broadband, Hardware, Mobility

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