The mobile market is becoming saturated, share prices are dropping, and many customers are turning to lower-priced MVNOs to get the best value for their money. Telstra in particular has been hit hard with a fall in the value of their shares, which dropped even further after they announced cost-cutting measures for the future. The focus is now on the rising customer demand for data, and it could have benefits for Australians who have often missed out on all the assistance of the modern mobile networks.
Data is one of the only features that determines the price point for a plan. With unlimited text and standard calls included on most plans, international calls mostly made using online VoIP services and international roaming becoming a thing of the past, data is an area that telcos can highlight to attract customers.
A relatively recent innovation was the standard charge for exceeding your mobile data limit. To address customers who were shocked to receive unexpectedly large bills because they exceeded their mobile data usage, companies brought in a new system that charged them in round numbers. Most companies charge $10 for going over the data allowance, buying 1 GB of extra data.
It was a better system in many ways, providing a much more limited cap for customers and lessening bill shock. However, the solution is not perfect, especially for customers who run out of data right at the end of the billing period and are charged an extra $10 for data they will not have time to use.
The latest advance in addressing the rising data needs of Australian consumers is introducing “unlimited” plans. Generally these plans have a set amount of included data, and then customers can use as much data as they want although their data speeds are “throttled” to no more than 1.5Mbps.
Data needs around the world are increasing, and Australia is no exception. Telstra CEO Andy Penn says that Australia has a 50% growth per annum in data volume, which is an unprecedented amount of demand for mobile data services. Telstra have already implemented their unlimited plans with Optus and Vodaphone likely to follow. Telcos have also partnered with various sites, groups and apps to offer “data-free” streaming – for example, Telstra customers can watch AFL games on their mobiles without using their data allowance.
Telstra Axe Excess Charges
Andy Penn refers to excess data charges as a customer “pain point”, and hopes that offering unlimited data will attract customers, even if that extra data is at a slower speed. Telstra are calling it “peace of mind” data, releasing customers from the need to track their data usage. As Australia’s biggest telco, Telstra don’t have to offer only the best value plan to attract customers. In this new phase, they say customers value the quality of their connectivity.
While data needs have been growing for some time, it’s only with recent increased investment that Telstra have felt capable of supporting the increased traffic that an unlimited plan would likely bring. While their share prices may have taken a hit, Telstra claims they have a net growth in customers. As well as unlimited data plans, Telstra are focusing their investments in other diverse areas of customer interest such as technology, building strong networks, customer experience, digital experience, and rolling out their 5G network.
5G and Data
With 5G on the horizon, telcos are wise to try to secure customers now. 5G will make mobile data speeds faster and more reliable, with functionally no latency. There are many people and that will pay big money for that kind of technology. For people who choose to stay with 4G, unlimited data is likely to keep them more loyal.
Telstra have been working with chip set, handset and equipment manufacturers so that 5G is fully supported when it is rolled out. They have also achieved a world first, with the first 5G enabled phone call on a commercial network made by Telstra last week. After the trials on the Gold Coast during the Commonwealth games, Telstra now plan to host the Global 5G Standards Setting Committee on the Gold Coast in September, which will start to trigger the “5G roadmap” that will see Australians become some of the first people in the world to have commercial access to 5G.
While paying for “unlimited” data isn’t necessarily the best option for someone who doesn’t like using the internet at slower speeds, there are groups of people who see 1.5Mbps as their normal peak speed anyway.
Almost half of Telstra’s network (by KMs covered) is still 3G, which means that the 1.5 Mbps advertised to city customers translates to the top speed available for many people in remote areas. Offering unlimited data on these speeds then means that remote and rural Australians with access to Telstra’s mobile services could end up paying $50 a month for an unlimited plan. It won’t speed up their internet, but for the people in these communities an offer of unlimited (albeit slow) data and promises to invest billions in their networks will be seen as good news.