OVO’s Sept. ‘17 100GB Mobile Broadband Plan

Note : This article ends with a link to a review of OVO’s service. WhatPhone was provided a free SIM with this 100GB of data bundle, from OVO, for that review.

Quick Summary

  • OVO Mobile are a relatively new, fast growing Optus 3G and 4G Plus network reseller.
  • They have released a new 100GB, 4G, Mobile Broadband plan, the largest prepaid mobile broadband plans we have seen marketed by any phone company.
  • WhatPhone research (see below) shows how important the mobility aspect to broadband is.
  • They (Mobile broadband plans of size 25GB and above) were our fastest growing category of plan on WhatPhone this year.
  • And these 75GB+ mobile broadband bundles do appear to be attractive to some groups of users.
  • Our suggestion is that the appeal of these plans is likely to be to two groups of users.
  • First, they will appeal those with below average fixed broadband data usage and, within that group, to individuals, rather than families.
  • Second, the plan is likely to appeal to those taking this mobile service as a second service.
  • This type of plan, however, is a significant indicator of things to come.
  • In our view, it won’t be long – we think only 12-24 months, before Mobile Broadband takes over from fixed. We show our workings, below.
  • This is a dramatic, probably unintentional effect of this sort of plan which could have significant impacts on the entire Australian market for broadband services, both fixed and mobile.
  • Having reviewed the service and the plans, our view is that they also leave some questions of fundamental importance unanswered : Is mobile broadband faster and or more reliable than fixed broadband, or not ?

Mobile Broadband is becoming much more popular

We have seen sales of Mobile Broadband services on WhatPhone rocket in the last few months, a trend started by OVO almost exactly a year ago. Current denominations of data plans start at 2GB a month (this and other lower end data plans appealing especially to those who use tablets) and rise to the 100GB plan that OVO launched today. The large end of the data bundle family serves those with external ‘dongle’ mobile broadband connections, usually for laptops.

We have covered the ‘phenomenon’ previously.

Without rehashing that article, the most important aspects of these 25GB+ bundles are :

  • This sort of mobile broadband connection now rivals the price and data inclusions of some fixed broadband price plans.
  • The huge 4G mobile data allocations involved change the nature of what users can do with them.
  • The only reason you’d really need this sort of 4G data monthly is to share the connection between multiple individuals and/or and to watch video content. For example, Netflix.
  • These bundles appeal to new types of users: Students, renters, business men and families.

We have also answered the question ‘How to pick the right mobile broadband plan.

What do we think of OVO’s plan, in a nutshell?

We think OVO’s plan is great. What they’re offering aligns completely with the research we’ve done recently. Australians want speed and reliability above everything else. OVO seem to understand that.

Matt Jones, CEO said (this from the Press Release) “Mobile broadband’s speed, reliability, ready availability and portability are all advantages, particularly compared to fixed broadband that is plagued with connection delays and impacted by weather and the quality of the connection to the home. And for the majority of Australian households that will consume less than 100GB of data a month, it’s an immediate fix to the constant buffering and drop-outs experienced when we all sit down of an evening to stream the latest episode of our favorite TV show.

Matt from OVO claimed download speeds of up to 100Mbps (download) – much faster than almost any current fixed broadband connection and as fast as the best you’d get under even the most expensive tier of new fixed NBN plans.

 

Matt from OVO claimed download speeds of up to 100Mbps (download) – much faster than almost any current fixed broadband connection
Above: Source

As always, we trust and verify, so, using an OVO service and a device which offers the best possible connection speeds, we ran a speed test. Holy cow. He’s right.

Speed test run from Smiggins Holes, NSW. Early September 2017. 10AM.

Above : Source : http://beta.speedtest.net/result/6594558320

Speed test run from Smiggins Holes, NSW. Early September 2017. 10AM.

Mobile broadband addresses some real needs

The below is a visual summary of the results from one of WhatPhone’s recent survey questions.

 

When it comes to mobile broadband bundles of size 25GB+, these are the factors which are most important to Australian users.

Above : Source : WhatPhone September 2017 primary research.

Our survey reveals an answer which might not have been immediately obvious. Speed and reliability of mobile broadband services are more important to Australians than the price of that service.

Also, the fact that people will buy this service from unknown brands is significant too, especially for OVO who, despite a recent push in to radio advertising are still to become a household name.

Some basics to be aware of when considering one of these mobile broadband services:

In short, pick a 4G, prepaid mobile broadband connection for the best experience.

  • Some mobile broadband plans are 3G : Especially given the primacy of the importance of speed in considering these services, it is worth noting that some plans currently on the market, from some operators, are 3G not 4G. 3G data connections are considerably slower than 4G. When comparing, make sure you’re picking a data plan which suits your needs. Our advice is to only pick 4G plans.
  • Some mobile broadband plans are prepaid : Some, including the OVO plans we are reviewing on this page are prepaid mobile broadband connections. Our view is that prepaid services are perfect for this sort of use case.
  • Mostly Optus : You’ll notice a lot of the action here, when it comes to the provision of these huge data bundles is coming from phone companies on the Optus networks. Moose Mobile and OVO are just two examples. There are others on the data plans page.
  • Some from the Vodafone network : Kogan Mobile and Lebara Mobile also offer data bundles on the Vodafone Network.
  • Network coverage between the major 4G network operators is now very, very similar : Coverage is very similar now for the 4G network maps offered by the major ‘tier 1’ phone companies.
  • Know what double data means: It’s also worth mentioning that some of these plans are ‘Super 4G’ ( called 4G Plus or 4GX by some phone companies. ) These plans use clever technical means to double the data download speeds you get.

Not sure of the difference between the types of mobile broadband plans we’re referencing here? We have an article designed to explain the difference between prepaid and postpaid mobile plans.

OVO love a bit of mobile broadband

Mobile broadband is obviously a key component of OVO’s plan range. This announcement of a 100GB bundle come to their first bundle Almost exactly a year ago.

This new plan is about 100% bigger than the predecessor significant in itself for reasons we call out below.

You can find out more about OVO in our review. It’s worth reading. We’re focused on mobile broadband here but they do have other aspects to their service, like a raft of zero rated content.

How much data do people use on fixed internet connections?

Quote : The short answer to this question is that, at the moment, people use : 3 or 4 times the amount of data in their fixed line connection as is included in OVO’s plan.

The viability of mobile as a viable direct substitute to a fixed connection comes down, in large part, to how much data people use on fixed connections. 100GB is a lot of data. But how much data do people actually use on a fixed broadband connection?

The short answer to this question is that, at the moment, people use : 3 or 4 times the amount of data in their fixed line connection as is included in OVO’s plan.

 

Above : Source 

Above : Source : The ABS quoted in ACCC documentation

Note also that the amount of data people are using over fixed connection has risen 52% in the last year and about the same for previous years.

My experience is that the ABS stats tend to trail real usage behavior by at least a year. And remember, these statistics are from the period in which we saw the arrival of Netflix, a confounding variable if ever there was one.

Remember, however, that these numbers are averages. That means there are as many people below average as there are above it. Most likely, individuals or couples rather than families would fall in to that bracket. There are also groups of users who would value this service above others, whether or not they used the full 100GB allocation. People who move house frequently, students and renters, for one, would be happy to avoid the set up costs associated with fixed broadband (where it routinely costs $100 to move a connection from one property to another. ) Families who like to keep the kids entertained on iPads in the back of the car on long journeys and business people too may be prepared to pay the extra for a mobile service, perhaps in addition to their fixed connection at home.

What 100GB plans could mean to the industry

Without getting too geeky on this new plan type, the potential ramifications for the industry as a result of 100GB mobile broadband plans are substantial.

First, as we can see, in the last 12 months, OVO have doubled the data they’re offering in their plans. Usage of fixed services is increasing at around 50% per year.

Reductions in price / GB for Mobile are outpacing price reductions in Fixed. As soon as 2019, Mobile Broadband could offer price performance which is better than fixed and which provide enough data for any kind of user.

 

It’s only an indicative chart. We’re not comparing apples with apples, exactly. However, it seems reductions in price / GB for Mobile are outpacing price reductions in Fixed. That means that, as soon as 2019, Mobile Broadband could offer price performance which is better than fixed and which provide enough data for any kind of user.

Industry economics seem likely to exacerbate this trend. The wholesale cost of NBN connections starts at about $60 per month. That means if any telco, including Telstra or Vodafone , want to connect a new customer to the NBN, they can charge, say $70 per month for it but have to give $60 of that to the government in the form of NBN Co.

If, on the other hand, Vodafone, or Telstra, want to connect a customer to their mobile network, using a mobile broadband bundle, they can charge $70 for it and make $70 per month. They own the mobile network, they lease access to the fixed network. The mobile option (considered at the margin of a new connection) is 80% – 90% different.

That’s a big profitability difference and an enormous incentive for the big phone companies to sell mobile plans, not NBN fixed plans.

It would be great if the phone companies shared their average speed and reliability statistics for mobile broadband services

Speed and reliability are important to people when they’re buying a mobile broadband service. OVO have made a great start here offering their own speed test facility:  notbloodynecessary.com

However, this is only the start. We’d love to see telcos advertise availability average download speed statistics. That is the speed people can expect to get at peak times.

We’d also like to know the proportion of time the network is available for users. Every phone company has network outages. To compare the phone plans we’re picking, we need to know those numbers. Fast food restaurants have to tell us the calories in the food we buy. Is it that different that a telco should tell us we could expect 5 hours downtime a year and an average speed of #*s ( out of a possible 5 )?

The word innovation is used every day. Whether you’re a customer of OVO or Optus, the most important things about this service are speed and reliability. Providing these data points would be an innovative step. OVO’s website gathers that data. Perhaps they will open the Kimono and share it. How does their mobile service compare to fixed? They buy their service from Optus. Is mobile as reliable as fixed??

Summing up – 100GB is of some use now and will soon be very useful

As you can see, the proportion of people who are using Mobile Broadband is tiny compared to fixed. So is the amount of data transacted over wireless data networks at this time. But a number of factors are pushing Mobile Broadband as the preferred service both from a customer and company point of view.

OVO’s 100GB plan is a bold move. There is a maximum number of people (someone once told me 200) who can access a single mobile tower for data at any one time. While the ACCC is explicitly looking into speed claims, Mobile Broadband is a mile field for statistical claims. That said, I tested the connection and my personal experience was exactly as claimed.

In 2017 / 2018, this Mobile Broadband package is probably most interesting for people who use less than the national average of around 250GB a month. That probably means people who don’t share their mobile broadband connection with too many people: Individuals, couples, business people and students/renters. It will also appeal as an additional connection for an existing family.

Sources :

You can find theoretical speed limits for telecommunications infrastructure here :

http://www.mobilenetworkguide.com.au/mobile_data_speeds.html

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.