For $5000 you could buy a round the world air ticket — maybe even two — a Prada handbag, or a dozen Apple iPads. Or you could buy 1GB of mobile data on TPG's $49.99 Super Cap plan when you go over the 500MB per month cap.
This was what TPG customer Paul Khoury "bought" when he decided to switch from Telstra to it and recently exceeded his 500MB allowance which triggered TPG's data rate under the plan of 5 cents per 10KB.
TPG's ADSL2+ business may be going gangbusters, but, according to its latest earnings update, it lost 12,000 mobile customers over the past six months. TPG spokesperson Craig Levy said that was because TPG didn't offer subsidised handsets, which people wanted, but a SIM-only package for unlocked phones.
"They want a 24-month plan and they want a handset and it's an expensive way of subsidizing a handset," said Levy. "The handset draws them in and that's not how TPG's model operates."
Khoury opted for TPG's model with his unlocked iPhone on 25 January. Besides the 500MB cap, it offered $1000 worth of phone calls. What Khoury didn't calculate, he told ZDNet.com.au, was that once his 500MB limit had been reached, he faced a rate of 5 cents per 10KB, as outlined TPG's website. In the form that Telstra expresses its excess charges TPG's pricing for excess data usage is $5 per MB — five times Telstra's excess fee of $1 per MB; which itself is higher than Optus' fee of between 35 to 50 cents per MB. It is Optus' network that TPG resells.
By 23 March, Khoury received an email from TPG explaining that his balance had dropped below $5.00. "And we have initiated a debit of $4159.93 to restore the balance to $20.00," the email read. "Thank you for using the TPG mobile phone service."
Khoury immediately cancelled his credit card and contacted TPG to enquire about the bill and asked TPG's customer service how he had gone so far over his cap.
"He correlated this to my data use and asked me what type of phone I was using. I told him I was using an iPhone," said Khoury. "The consultant said this is often the problem it has with iPhones: they automatically start downloading software unbeknownst to the user. He suggested I needed to turn my automatic Wi-Fi detection off, which I did."
"But why would I be charged for using the internet through Wi-Fi?" Khoury asked.
When Khoury questioned the charges, the consultant said Khoury had viewed its terms and conditions and insisted therefore that there was no problem with the charge, despite the fact that the consultant had himself had needed time to calculate how much excess data would cost.
"I asked him to workout the charges if I went over my cap by an additional 500MB. It took him seven minutes to work it out, and he came back to me admitting it would cost $2500," said Khoury.
Levy's response to ZDNet.com.au was consistent with Khoury's recollection of the consultant's view.
"If the situation is that a customer has used the data, and signed up to the rates that we advertised and had the ability to check their usage, then technically they are liable for their charges on the plan that they took," he said. "It's like if you took a credit card and spent it in a particular retail outlet, and then you got a bill at the end of the month. You are responsible. There are no two ways about it."
Levy defended the charge, saying that all its customers are sent a text message prior to their reaching their limit.
"We give customers a text message warning when they get to 75 per cent of their usage. So we tell them when they've used 75 per cent of their cap, which tells them where they are. We also give customers access to their online bills through their usage."
However Khoury disagreed that the text had been sent when he hit 75 per cent and was critical of the delays in TPG's alert system: six days after receiving the TPG text he said he received an email outlining that he owed the company over $4000.
"The text I received was not after I had used 75 per cent of my cap. Indeed in their fine print TPG state that 'Generally, usage records will be available online 48 hours after the usage event.'" said Khoury.
"TPG warns that it will debit your account as soon as your cash reserve falls below $20. In my case, however, it was six days after I received the warning text that I received an email advising me that I had almost reached my cap. That email advised me that my account would be debited for $4159.93."
As for TPG's website, Khoury said he has had ongoing problems accessing it. "When I signed up with TPG I could not log-in, so I called them to ask them for my details. I was able to log in. The next time I tried to log in I couldn't, so I had to call them again to reset it. The next time I logged in I could not get in," he said.
"I knew my number and customer number and had them at hand to check and used the same password I always used. So why was I locked out yet again? Why can you not reset a password via the TPG site as with other mobile providers?"
Since then, Khoury has lodged a complaint with the Telecommunications Industry Ombudsman (TIO). TPG has of yesterday also failed to resolve the complaint within the 10 days the TIO offers under its process.
Levy insisted Khoury's case was unusual, that 99.9 per cent of its customers did not exceed their cap. "Let's say we go under the $19.99 product; we give them $300 worth of value. Although they might be paying a higher rate (5c/10KB) for data, they're not actually paying that rate because we're giving them $300 worth and it's included in the cap. I do understand that if they go outside their cap then they will have to pay that. But most customers position themselves where they are comfortable," he added.
Customers on its $19.99 deal can consume 60MB of data — less than half of Telstra's $10 mobile phone internet package — and after this they face its standard $5 per MB charge.
When asked if TPG would change how it presented its prices for its Super Cap plans to bring it in line with its competitors such as Telstra, Vodafone, Optus and even its own Pay as You Go product, where excess is charged at 2.75 cents per MB? "We don't have that many problems with it. Can it be refined? There's always room for improvement," said Levy.