Following the release of its first IT Strategy last week, the Victorian Government has announced that it will overhaul its lucrative Telecommunications Purchasing and Management Strategy (TPAMS). TPAMS is the framework whereby the government procures telecommunications and IT services and equipment from eligible providers.
Joining us tonight on Who Wants To Use The NBN? is our carry-over champion, Alan. Thanks to this broadband nirvana we now inhabit, Alan will be joining us via High Definition video link. Good evening, and welcome to the show.
We here at Dog and Bone have felt for some time that Optus has a clear identity issue.
This is perhaps ironic for a company that strives so very hard to push its particular brand, from the venerable ‘Yes’ campaign that won’t stay dead, to the unfathomable wild animal campaigns of last decade, to that lethally cute little lemon drop guy they have now. Perhaps it’s not ironic, and the rebranding perfect illustrates the issue.
The Australian mobile telecommunications marketplace has matured to a point at which the stream of new customers has slowed to a relative trickle. Our telcos are increasingly obliged to poach customers from each other, with the result that they are being forced properly to compete.
This has seen the major players introducing new products, new services and otherwise trying to increase the value of their mobile offerings. Telstra this month has introduced new measures to combat bill-shock, whilst also reducing the price on many of its data packs. Optus has done the same. Virgin Mobile has introduced monthly data rollover.
It seems like a great time to be a mobile customer in this country. But how do we compare to other, similar countries such as the United States or the United Kingdom?
Virgin Mobile recently released a data rollover provision whereby an unused data from a particular month will become available for use in the following month (but no later than that).
Seems pretty good, but …
T-mobile in the USA offers a similar service – called Data Stash – that stores unused data up for 12 months. (Other US telcos such as AT&T and Sprint offer a month-to-month service.)
Vodafone Australia are great believers in giving you bonus data when you sign up, usually as part of ‘limited’ offers (though there’s almost always one of these one). For example, right now if you sign up to an $80 per month plan Vodafone will throw in an additional 4G of LTE data, on top of the 4Gb already included in the plan.
Seems pretty good, but…
Sticking with T-Mobile in the USA, they offer a 10Gb upfront buffer on their cell phone plans, which you have to get through before you even touch your included monthly allowance. This 10Gb is valid for 12 months after you sign up.
Vodafone UK, meanwhile offers three months of unlimited data on new SIM-only plans (one of which includes an attractive 6Gb for £27, with unlimited talk and text).
Automatic Data Packs
Both Telstra and Optus now automatically add a $10 1Gb data pack to your account as soon as you exceed your monthly data limit, ensuring that you won’t be slugged with exorbitant pay-as-you-go rates.
Seems pretty good, but…
A few telcos overseas actually offer unlimited data. For example, Three Mobile in the UK offers SIM-only, month-to-month plans starting at £17 (A$32.60) that includes unlimited data(capped at 50Mbps, and subject to their TrafficSense limitations). It is also important to point out that many overseas carriers do not allowing smartphone tethering.
Vodafone Australia has sought to position itself as the best telco for those travelling overseas. For $5 per day you can access your domestic phone plan in 47 countries around the world.
Seems pretty good, but…
This is a bit of a confusing area, since so many international carriers have different ways of charging for roaming. In the scheme of things, Vodafone’s $5 per day is actually competitive.
For example, Verizon in the USA offers 100Mb of data for $25US per month, and 100 minutes or voice and 100 SMS for an extra $15 above that. Sprint, meanwhile, is set to introduce anInternational Value Roaming plan, which allows for unlimited roaming in 15 counties, but only at 2G speeds. T-mobile already offers a similar service which applies in over 120 countries. But roaming on 4G is still exorbitant.
Three Mobile in the UK, meanwhile, allows up to 25Gb of data usage overseas via its Feel At Home provisions, but it’s astonishingly complicated. There’s also a £5 per day Eurozone pass (and apparently bad things happen if the two are combined). Vodafone UK offers the same service as our Vodafone, but for £3 per day.
Issues of geography and distance will almost always mean that mobile plans in this country will be higher, because the infrastructure to provide them costs so much more to implement. Overall, Australian telcos are making steps in the right direction.
But we should not pretend that we’re getting world-beating value. There’s a good reason why overseas visitors are invariably shocked when they learn how much our telecommunications services cost.
Good news for mobile data users who are prone to exceeding their data cap: Virgin Mobile has announced the introduction of rollover data.
This means that all of your unused data from a given month will rollover, and be added to your mobile data cap for the following month.
However, you should be warned that this data will not accrue indefinitely - it is only valid for one month.
If you’re the kind of user who uses all of your mobile consistently - and perhaps has to purchase an additional data pack - this new provision won’t be of much value. Virgin said that fewer than 20% of their customers fall into this category.
Far more common are users who occasionally exceed their limit. Around 40% of users will exceed their cap at some point in a given six month period.
For those users the unused data from the month before will provide a welcome buffer, and may obviate the need to purchase an additional data pack. Virgin’s own modelling suggests that about 50% of these customers will see savings due to data rollover.
When asked whether this would affect Virgin’s mobile revenue, CEO David Scribner suggested that modelling had suggested that any impact would be minimal, though stressed that they’d be closely monitoring how it worked out in the real world.
Virgin’s move follows the introduction of rollover data by major US carriers AT&T and T-mobile late last year. Like Virgin, AT&T only provide a single month of rollover, while T-mobile allows the data to accrue for an entire year. (I should stress here that US mobile plans are considerably more generous than Australian ones.)
When asked why Virgin was only allowing a one-month rollover, they responded that doing so was consistent with the way voice and text currently rolls over. Telcos love to trot out the ‘consistency’ line, as though customers would grow disoriented or enraged at the inconsistency of having the data last longer.
Anyway, I don’t mean to suggest it isn’t a pretty good deal. It is, and is much welcome. All Virgin postpaid customers who sign up from now on (after March 4) will automatically enjoy this new feature. Pre-existing customers will have to upgrade their plan (at no cost and without signing a new agreement).
Virgin Mobile is an MVNO that runs on the Optus network, including LTE capacity. It is the largest MVNO in the Australian market, with a market share behind only Telstra, Optus and Vodafone. While it isn’t a cheap as some of the truly budget providers, it does historically boast more competitive pricing than Optus or Telstra.
If you feel that data rollover would be of value to you, then you should certainly check them out.
Optus, no longer content with its clear second position within the Australian mobile telecommunications market, has reiterated its commitment to overtaking incumbent leader Telstra.
Optus currently had about 9.6 million mobile subscribers, while Telstra has around 16 million (Vodafone is a distant third with 5 million). Optus has committed to investing $1.2 billion dollars in the next financial year on both fixed line and mobile networks, in the process extending its LTE ‘4G’ coverage to about 90% of the Australian population by March 2015. That’s pretty soon, and thus pretty ambitious.
Optus hasn’t released investment figures for the following financial year, though one suspects they won’t be modest, given that they’ve targeted a 98.5% LTE coverage figure by 2016.
Bear in mind that Australia’s relatively low population density means that going from 90% to 98.5% is many times more costly than going from, say, 50% - 58.5%. That last 10% of the population has always been an issue for telco providers – or just about every infrastructure provider – since it exists well beyond metropolitan centres, and consequently provides no return on investment. It’ll be interesting to see precisely how much Optus is willing to spend. Certainly it’ll have to be a lot more than they spend at present.
Anyone driving between cities, or even regional centres, in Australia has probably noticed that coverage becomes a problem the further out you go. You eventually reach a point where Telstra’s network is the only one available. Then you reach a point where your phone doesn’t work at all (at least not as a phone – it still works as a clock). To put it another way, Telstra’s network services 99.3% of the population, but less than 50% of the actual landmass.
This provides a revenue and marketing advantage that Telstra certainly doesn’t care to relinquish. In the next financial year Telstra will spend over $1 billion just on maintenance, upgrades and extension to its mobile network. And you can bet they’ll respond aggressively to any move by Optus to encroach on their market share (mobiles account for over a third of Telstra’s annual revenue).
Still, let’s hope that Optus are as good as their word, since it’ll only be to the benefit of consumers.