Vodafone's data changes highlight telco fightback

Summary:Vodafone's decision to start charging in per-megabyte blocks for prepaid customers isn't out of the norm, but it does highlight a fightback from telcos on over-the-top applications.

Vodafone Australia's decision to start charging in per-megabyte blocks for prepaid customers isn't out of the norm, but it does highlight a fightback from telcos on over-the-top applications.

Vodafone has announced to customers this week that it will be changing its prepaid plans from mid February to remove the unlimited access to Facebook, YouTube, and a number of other social-media websites, and will also begin charging in per-megabyte blocks.

A brief glance at the prepaid offerings for Telstra and Optus show that both of these companies already charge in per-megabyte blocks for a number of plans — except for Optus, which charges in per-kilobyte blocks for data that comes from within Australia, and per megabyte everywhere else.

Vodafone said that it made the change to simplify plans, and is more in line with how its customers are using data.

That all makes sense. What is interesting, though, is that there would be many apps that don't use more than a few hundred kilobytes per session, such as the fairly ubiquitous social-messaging services like iMessage or WhatsApp.

These apps have been a concern of telcos worldwide for a while , although it is a bigger problem in the US than it is in Australia, because most standard prepaid and post-paid phone plans in Australia have unlimited texts built in.

There's no doubt that WhatsApp, BBM, iMessage, and any other number of data-based messaging apps are putting a dent into the number of text messages being sent, though. Research firm Ovum estimated that in 2011, telcos worldwide lost US$13.9 million in revenue due to social messaging.

However, the shift to per megabyte doesn't highlight a desire for the Australian telcos to shift their customers back from data to SMS, as it might be in other countries; it is more a push to try to get every last cent out of data possible, as more and more customers shift from using the traditional voice and text services to almost exclusively using data.

It's easy to tell that they don't begrudge the so-called "over-the-top" applications; they just want to monetise them. Telstra CEO David Thodey even admitted that he himself uses WhatsApp in a shareholder investor day last year.

Unfortunately, for now, it seems that the only way the telecommunications companies see that this can be achieved is by making Australians pay slightly more (or use slightly more) for their data than they do today.

Topics: Telcos, Optus, Telstra

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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