3G access pricing madness: The iPad example

3G access pricing madness: The iPad example

Summary: Check out the different pricing structures in operation for 3G. Implement BYOD. Now go figure a global rollout strategy. It is much harder than you think.

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Mobile World Congress will soon be here. Reports about the proliferation of mobile devices are everywhere. The ongoing debate about BYOD shows no signs of abating. Security, that evergreen topic for paranoid IT types is ever present. But what about the cost of access? If you're looking at mobile from a global perspective what can you expect to find in pricing plans? Chaos, obfuscation and huge differences in cost across territories.

For anyone other than a large enterprise able to exert its buying power muscle, establishing a coherent plan for access across all territories that does NOT give rise to bizarre anomalies is next to impossible. Nowhere is this more obvious than in iPad 3G access pricing.

Back story: I recently bought an iPad 2 with  3G . It was probably a mistake on my part as there is an iPad 3 due to be launched soon. Ho hum. As I trawled through the data plans it was pretty straightforward to make the right choice for the UK. But then I spend time in the US and Spain so what to do there? As Jamesy_boy pointed out, I can use one of the Android devices I carry to create a wifi hotspot and so overcome the need for a dedicated  3G  service but that's not always convenient and then there is the battery life problem. Maybe I should do as I have done on Android and go for PAYG access? It was a this point I became painfully aware of the pricing differences across territories, even among vendors in the same global group.

The following from pages a the UK online Apple Store:

1GB is hardly worth bothering with and especially if you watch any video. I can't imagine why the vendors offer this. Look at the price disparity. 3 offers 10GB/month at £15 ($24), Orange wants £25 ($39) while that same £25 will only get you 5GB at Vodafone. You have to check coverage and quality but in conversation with the Apple Genius, I was able to confirm the 3 does offer the best value.

But then flip to the Spanish Apple Store:

Vodafone is my Spanish provider so I clicked on there first:

Duh? 500MB at an introductory rate of €7.50/month for three months and then €15/month ($20) at a speed of 7.2Mbps and then throttled to 128Kbps? I could get through 500 MB in no time at all with use of tools like Hootsuite plus Facebook notifications. 10GB of data rises to an eye watering €49 ($64). You can argue there is the added inducement to acquire a device at lower cost by agreeing to a long term contract. Regardless of chosen plan, the saving is roughly the equivalent of five months full access over the 24 month period. In reality I don't see business people signing up for that type of contract. The pace of change at Apple is too fast to make a two year horizon seem feasible. Today, iPad is a crippled business tool but there is no reason to believe that at some point, its compute capabilities will reach a point where it can be viewed as a laptop substitute.

Just for giggles I hopped over to the German Apple store:

Prices seem to be somewhere between what I could find in Spain and the UK but again, there is complexity to be traversed. What about the US?

And there I was thinking that we have it tough in Europe? I can only surmise that the lack of robust competition in the  3G  access market keeps prices in nose bleed territory.

No wonder the telcos would love to see the consumerization of IT and BYOD proliferate. As things stand, it is a license to print money at everyone's expense.

One developer I spoke with recently said that if we were to start developing an ERP from scratch today then we'd go straight to mobile UIs. It's an interesting thought. But until there is equity in charging structures among the global telcos it is hard to see how any IT organisation can cobble a coherent mobile rollout strategy that doesn't lead to important questions around the cost of keeping those mobile workforces err...mobile.

Topics: Hardware, iPad, Mobility, Wi-Fi

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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34 comments
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  • RE: 3g access pricing madness. The iPad example

    I'm in SA and surprised how much I'm being ripped off roaming with my iPhone. My previous phone was a Blackberry which could do e-mail without requiring extra plans or exorbitant charges.
    Stephen.Smith@...
    • RE: 3g access pricing madness. The iPad example

      @Stephen.Smith@...

      You made a giant leap into Mt. DOOM! iPhone...Thumbs......DOWN!
      Rob.sharp
  • RE: 3g access pricing madness. The iPad example

    Move along. Nothing to see here. It is in the DNA of 'phone companies' to obfuscate billing. Some of it has to do with the fact that governments are intimately involved with their hands in the cookie jar. It was just a few years ago that a levy on land lines was dropped. A levy imposed to pay for the Spanish-American War!
    dheady@...
    • RE: 3g access pricing madness. The iPad example

      @dheady@... if there's nothing to see then why did you read? The point is that if people are not aware or only marginally aware then they don't have insight into what's going on.

      I read somewhere that in some nation states, families are putting the payment of their mobile bill ahead of putting food on the table. Any provider taking advantage of that is acting cynically IMO.
      dahowlett
  • RE: 3g access pricing madness. The iPad example

    The funniest thing is - you need to pay about $1000 a year (12x$80 + tax) to access your 3G device, and that seems to be a non-issue. People just pay. At the same time, the price difference of $200 dollars between Apple and Android mobile devices spur lengthy debates here. Go figure.
    ForeverSPb
    • RE: 3g access pricing madness. The iPad example

      @ForeverSPb - well it's a g-ddam issue for me !!
      dahowlett
      • RE: 3g access pricing madness. The iPad example

        @dahowlett thanks for doing some of the legwork surfing around and capturing screenshots of the prices to make a comparison... I would have however, expected you to do a more complete job and actually present a matrix comparison along with some non-emotional guidance to help us readers justify our time spent reading this ZDNet content... you really did a half assed job this time but I look forward to reading the full report should that ever become available.
        sw123
  • RE: 3g access pricing madness. The iPad example

    Really !!!

    We went form comparing wireless data plan pricing to the ipad is a crippled business tool.

    You guys really need to start doing your jobs again !

    " ZDNet is a one-stop destination for professionals seeking to research technology-related issues, and solve business technology problems. Delivering a broad range of news and analysis from top editors and IT experts, the site features blogs, product reviews, software downloads, videos, white papers, Webcasts, peer feedback, and research."


    What next McDonald's stops using pink slime in their meat and Apple refuses to release French Frie apps for the Ipad.
    Serious _Yahoo
    • RE: 3g access pricing madness. The iPad example

      @Serious _Yahoo - what is the matter with you? Incapable of joining dots?
      dahowlett
  • Not the full story...

    In Germany, you can get multiple SIMs on one contract. I'm on 49??? a month for flat rate calls to land lines and T-Mobile, plus 200 SMS and flat rate data (5GB at full speed, then throttled). For that contract, I can get up to 4 SIMs for use in different devices, so I can use, for example, one card for my mobile, 1 for a tablet and 1 for my laptop - in actual fact, I still haven't found a reason to bother buying a tablet yet, so I haven't bothered with extra card.

    My boss has his iPhone 4, iPad 2, Samsung Galaxy SII and his ThinkPad Z all on one plan, with an all-net flat for 70???
    wright_is
    • RE: 3g access pricing madness. The iPad example

      @wright_is - I thought I saw something along those lines but my German isn't that good. And yes - more generally, there will be bundling deals to be had...all adding to the complexity.
      dahowlett
  • I use my iPhone 3G Hotspot on Sprint.

    My iPad is the wifi only model... and the Hotspot service costs an extra 25, but I can use it will not only my iPad but with my laptop when needed. Not sure why I would pay the extra $80 for the 3G iPad Plus the fee... and then only be able to use the 3G with the iPad. Why does ANYONE buy the 3G iPad? The Hotspot service on the phone is always cheaper on every carrier and more flexible.
    condelirios
    • RE: 3g access pricing madness. The iPad example

      @condelirios - yet another data point in the 'madness' debate. It comes back to the central question - why do we put up with it?
      dahowlett
    • Even More Confusing

      @condelirios
      So I go ahead and pay to allow tethering thereby propelling myself to that throttling sweet-sopt even faster than I do with the phone alone....

      and let's not forget if you are an AT&T legacy unlimited data customer. To do this you have to throw your unlimted away.... but that's another issue...

      When will someone come out with a standard realistic shared plan?
      Well... at least in the US......

      :(
      rhonin
    • RE: 3g access pricing madness. The iPad example

      @condelirios

      I for one, bought an 3G iPad, because it has GPS in, while the wifi one does not. For almost a year, I haven't put any SIM card in that iPad -- so yes, there are reasons to buy that model.
      danbi
      • ???

        @danbi
        Then how does my wifi ipad know my specific location when I bring up Google Maps or the built in map app?
        rhonin
    • RE: 3g access pricing madness. The iPad example

      @condelirios Actually, there is a very good reason to by 3G iPad. The 3G plan is month to month. This means that if you don't want to pay the tethering charge every month, you just pay the monthly 3G fee and use it for a month. Where does this help? When you are taking a long road trip or when you are on vacation and the hotel charges $25/day for WiFi. When the month passes you pay nothing and continue using the WiFi that is built into the iPad. Please keep in mind that the 3G iPad has WiFi in it too.
      mikies
  • RE: 3g access pricing madness. The iPad example

    Part of the problem with all the CellCo's they are modern day robber baron's, though your 3 contract in the UK was ill-advised, as for a few pounds more they do 'All you can Eat Data', which you can hitch your Mobile HotSpot App too as well.<br><br>Where I think a bit of a cabal of self interested groups could poke one in the eye of the CellCo's, and free themselves of the bind to them, and offer some real cometition in the marketplace.<br><br>If<br><br>Apple<br>Amazon<br>Tesco of the UK who already have a large sized Virtual Mobile Operator<br>Walmart<br>Google<br><br>all chipped in and they bought T-Mobile Globally, there is an instant global competitor independant of the rest with it's own infrastructure.<br><br>Which could offer a new thinking on Cell Contracts<br><br>For a reasonable monthly sub - range of offerings<br><br>- Unlimited calls within your country<br>- Unlimited Texts within your country<br>- 1, 5, 10Gb and Unlimited Data - to use how you see fit - no Tethering rip-off.<br>- A fixed range of Global Roaming options applying the above globally - 1week, 2 weeks, monthly, quarterly, annual. Broadly similar to how Amazon's 3G Kindle 'just works anywhere'.<br><br>The corporate world and many consumers would jump ship into this new ecosystem.<br><br>In the meantime, best global alternative is Fon or finding out other free WiFi and avoid the hotel WiFi rip off.
    neil.postlethwaite
  • RE: 3g access pricing madness. The iPad example

    Canada
    250 MB/month = $15
    5GB per month = $35
    magnificentnile
    • RE: 3g access pricing madness. The iPad example

      @magnificentnile - what can you do with 250MB? Sheesh....
      dahowlett