Stripped-down mobile plans need to be broken down further

Stripped-down mobile plans need to be broken down further

Summary: Optus is on the right track, but what it needs is a properly pared-down mobile plan.

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With Optus choosing to implement plans with auto-incremental billing blocks for data and voice, Australian telcos are headed in the right direction, but they need to go further.

It is welcome news that the telcos are moving to a billing structure that is more usage based than plan based, but why stop with the blocks as they currently exist? What is needed is more usage-based billing, not less. And the telcos should not stop until a point is reached where consumers are offered a barest of all plan foundations, or no foundation at all.

Take the new Optus AU$50 plan, for instance. It arrives bearing 500MB of data and 450 minutes of calls per month. That's close to 500MB too much data for many older users, and almost 450 minutes of calls that younger users do not need. Given that Optus' excess increments are in blocks of 1GB of data for AU$10, and 200 minutes of voice for AU$10, some exceedingly rough maths breaks down Optus' base plan into an AU$25 service fee, and AU$25 of "bundled value".

As a first step, it would be nice to be able to designate how that AU$25 of bundled value is broken down. For many people, the default package will service them well, but for those who make greater use of data, a plan of 2GB and 100 minutes of voice per month would be more fitting.

At this point, we must cue the doomsayers and other chattering twitterati who are at pains to point out that telecommunications in Australia will soon disappear underneath a twitching pile of data-billing greed.

Unfortunately for them, reality will intervene and dictate that the telcos cannot approach the sort of rorting that occurred in the days of pay-as-you-go 40-cent texting.

It is true that data packages are becoming more expensive, but what exactly was the invisible hand of the market to do when the powerhouse of past telco profits — the SMS cash cow — began to disappear under morasses of WhatsApp, Facebook Messaging, and iMessage?

As SMS begins its phase out, and voice continues its slow replacement by various IP telephony services, data will have to shoulder the burden of network maintenance. The long-term evolution (LTE) that you love is not free, and if data is where all the services are heading, then so too will the costs.

The days of absurdly cheap data are over. The first dose is always free, and as newly born data junkies, it's time to accept that we are hooked. Users can keep chasing the data dragon all they like, but it's time to pay up.

This is the price of data's victory over voice and SMS.

Therefore, in this newfound capitalist spirit of only paying for what is needed, mobile plans need to fully embrace the new auto-incremented billing structure that Optus has pioneered, and take it further.

We can even let the telcos raise their block cost by 50 percent to AU$15 per block, and start from a blank slate of "bundled value", and a user who makes use of 3GB per month and very few calls will still find greater value than Telstra's AU$100 plan option.

Not only will a plan like this give consumers that warm and fuzzy feeling of having a plan tailored to them, it will come with other benefits for customers that usage-based billing can bring.

Go on an holiday for three weeks to a place with little connectivity, and not use any data? Then don't pay for a quota that you will not use, and only pay for the blocks that you use on your return.

The telcos may lose a little cash here and there with such a scheme, but that will no doubt be recovered by customers using more data, as services such as mobile streaming take off, and the knowledge that bill shock is a thing of the past. A comfortable user is far more likely to use data than one who is in constant fear of busting their quota.

With 1GB blocks, the telcos also get the added bonus each month of being able to pocket the money dedicated to unused quota as pure profit. A user that consumes 1.01GB per month is twice as profitable as their provident friend who wisely used only 990MB of data.

Rather than decry the shrinking of data quotas and the introduction of gigabyte data blocks to paint a new mobile dystopia that looms just over the horizon, it should be embraced as an opportunity to dispense of the services and voice quotas that are underutilised.

It's possible that this trend may take us to a better place, even if it is one that we are carried kicking and screaming into.

Topics: Telcos, Mobility, Optus, Telstra

About

Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

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5 comments
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  • these prices make me cringe now that I'm thinking of moving back to Oz

    here in the states I get 100 min and 5GB data (and unlimited texts which I don't use anyway) for $30 USD/month with no extra charges
    theoilman
    • Yeah, expensive.

      For AU$25, we unlimited calls to all networks, "unlimited" 500MB data (after 500MB, it slows to GPRS speed) and for another $AU5 we get unlimited SMS. GB packages for data cost around AU$10.
      wright_is
  • these prices make me cringe now that I'm thinking of moving back to Oz

    here in the states I get 100 min and 5GB data (and unlimited texts which I don't use anyway) for $30 USD/month with no extra charges
    theoilman
  • Give 'em a slider?

    I like the idea, but if you want to truly "empower" the end user, give them a slider and let them set their own "bang for the buck." They pay their $50 (or whatever) and on their account screen on the provider's website they are given a slider where they can slide the bar left or right to change the amount of voice vs data they want. Make it something they can change however they like. The slider could even be linked to their usage so that as the month goes by they could adjust the slider again if they need to and the slider would "know" what the floor of their remaining data and voice availability is. This would also give the providers "real-time" usage information for planning expansions and upgrades - their users would tell them what their planned usage is, month-to-month.
    gevander
  • UK mobile prices

    If you already have a phone, for 16 GBP per month in the UK you get 300 minutes, 5000 texts and unlimited, repeat ulimited, data.
    This seems so much cheaper than Australia and the USA that it partially makes up for the ridiculously high fuel costs here - unleaded petrol currently costs 1.31 GBP per litre = 5.94 GBP per UK gallon = 4.75 GBP per US gallon = US$7.23 per US gallon = AU$7.92 per US gallon = AU$9.90 per UK gallon.
    JohnOfStony