Telstra BigPond Next-G goes ‘ExpressCard’ at last, WiMAX threat looms

Alex Zaharov-Reutt
Saturday, 21 April 2007 21:55

Opinion and Analysis

Here’s an anecdotal story to explain. I have friends that have the Orange business version of the Next-G wireless broadband card. They were at something like a $29.95 plan, with 400Mb download. It might have even been a 200Mb download – I’ll need to check the pricing plans. But whatever the exact plan was, it wasn’t generous in the download limit area, despite having a low monthly cost.

They aren’t p2p users, they don’t download movies or TV shows, but with updates and emails and websites they still managed to go over their limit, and were shocked by the pricing. They’re getting ADSL 2+ and Wi-Fi instead, with their card and plan going to a friend who has more of a need of wireless broadband, and probably little appreciation of the cost.

The big ace up Telstra’s sleeve is the breadth, depth, speed and reliability of their wireless broadband Next-G network. If you need Australia-wide access, Next-G is it. If you need that access, it’s even worth paying for at the prices of $114.95 for 1Gb or $184.95 for 3Gb at the Next-G speeds 550k to 1.5Mbps.

But does anyone want to pay that? No. You’ll only pay it if you absolutely need broadband speeds anywhere. If you travel a lot, and can survive on a slower wireless speed in country areas (until you get back to a hotel which is equipped with in-room broadband, or can get to a McDonalds or StarBucks or other area with broadband Wi-Fi that you’ll have to pay for), a cheaper deal is Vodafone, who now offer 2Gb of data on their HSDPA 3.5G cards for, from memory, AUD $79.95. They used to offer 1Gb for $99.95, and have obviously dropped their pricing to deal with the X-Series 3 Mobile threat.

3 Mobile’s X-Series offers the best deal of 2Gb for $40 – but once you’re in the country and roaming, or get onto roaming even while in HSDPA 3.5G coverage zones, you’re up for $1.65 per mb, most of which, I believe, ends up going to Telstra, who are 3 Mobile’s GSM/GPRS/EDGE/voice partner. $1.65 per megabyte can certainly get expensive, but users know this, and can set their 3 Mobile PCMCIA and ExpressCard modems not to connect in roaming GPRS/EDGE areas for this very reason.

Virgin Mobile just announced that they are charging $10 for 1Gb of download, or a much lesser plan of $5 per month for a measly 50mb. Either way, if you go over your limit, you will be charged 1.5c per kb, so if you download 2Gb on your Virgin Mobile 1Gb service, you'll be paying well over $15,000! Ouch! That's no way to get your customers to love you.

For telcos to keep their customers, and stop them churning at the first opportunity to WiMAX or a lower cost competitor (as 3 Mobile has proven to be), they need to offer realistic pricing to consumers.

What do consumers want? Realistic, affordable pricing with generous download limits, whether over wired or wireless connections.

What do telcos want? They want to make the most profit they can from their customers. But in doing so they often seem to gouge their customers until they can’t take it any more, and churn to someone else.

A telco that actually offers realistic pricing and generous plans will get their customers to love them, and not want to change or churn to someone else. How many people can say they love their telco? Probably about as many that love their bank. Heck, probably fewer than that.

VoIP Internet phone calls threatened to kill fixed and cell/mobile phone companies. Traditional telcos did the only thing they could besides offering their own VoIP services – they dropped prices.

What happens today? There is a good mix of VoIP and traditional phone services in use, with cheaper prices for telecommunications all around. Neither side has won over the other, with traditional phone companies still holding the upper hand in terms of customers and revenue, despite the successes of VoIP companies around the world and software like Skype. Price competition is still happening, and the battle for dominance in this space hasn’t yet been won, with even WiMAX threatening to upset voice prices further.

The same thing will happen in the wireless mobile broadband space.

Intel believes WiMAX will bring cheaper prices for consumers to download gigabytes of data wirelessly, virtually wherever they are, just as with phone calls today.

But what it will do, when it finally arrives, is get telcos to finally offer the cheaper pricing and generous, multi-gigabyte (or tens of multi-gigabyte) downloads to consumers, just a capped plans offer consumers hundreds of dollars of calls for a fixed price.

3 Mobile now offers 2Gb of download, within their HSDPA network, for AUD $40 per month, with 4000 minutes of Skype calls. $30 buys you 1Gb of downloads and 2000 Skype minutes, while $10 buys you 500Mb of downloads and, from memory, 1000 Skype minutes.

Telstra’s new Express card has a range of cheaper rates for smaller amounts of download, with $114.95 for 1Gb and $184.95 for 3Gb at the 550k to 1.5Mbps speeds. From memory this is either the same, or a tiny bit cheaper, than the PCMCIA and USB modem pricing.

Why can’t consumers have 10Gb of download for the $114.95? Or 5Gb for $50? Or 2Gb for $29.95? Or better pricing still?

That would instantly make Telstra’s pricing the best in Australia, aside from Unwired’s PCMCIA card which offers 12Gb of downloads in most of Sydney or Melbourne at speeds of up to 750kbps at around the $100 per month mark.

This is ultimately where mobile data pricing will go. Heck, it’s there already with Unwired, a pre-WiMAX standard that is meant to be upgraded to WiMAX in the not-too-distant future. 3 Mobile might be the next to offer that pricing.

Telstra should bite the bullet and do it now. All wireless users will have a real option to go to, and many will feel compelled to switch. I certainly would, if I were using Vodafone or Optus, although if I was an X-Series subscriber, I’d be putting pressure on 3 Mobile to give an even better deal than the current 2Gb for $40 offer before churning over to Telstra. 

When are we likely to get the kind of pricing that Unwired offers today? Probably in a couple of years, when the WiMAX threat is about to be unleashed. It might come sooner, and it might be 3 Mobile to force other telco’s hands.

WiMAX won’t be a panacea to start with. It too will have dropouts, network blackspots and other problems, as all networks do when they first start. They might even increase their prices, who knows? Companies do weird stuff all the time. But it’s unlikely, and if WiMAX truly is fast, truly is world wide (as promised) as is at the right price, with generous download limits, it threatens telcos like nothing has before it.

For now, Telstra feels justified in charging the most expensive price because they have the best network, and if you need broadband almost anywhere, and especially if you travel a lot, no-one else offers anything as good, as fast, as convenient… or as expensive.

But it’s a market driven thing. While I’d love to see Telstra drop their mobile broadband pricing and offer much, much greater download limits, I just can’t see them doing it until the WiMAX threat becomes real.

Even X-Series and Vodafone’s price drops seem to have had no effect. Yet.

But I’m sure that ultimately they will, and that Telstra will have no choice but to drop their pricing. The cost of bandwidth has come down in massive terms since the early days of 28.8k dial up at $5 per hour for fixed users.

I’m very happy to see that Telstra have finally launched an ExpressCard Next-G service for PC and Mac users. I’m assuming that it’s Vista compatible too, as the PCMCIA and USB Modem services now are and have been for a while now, although I haven’t checked, even though I should have. You can check easily enough for yourself at www.bigpond.com if you’re interested in the service and are running Vista. And if Vista support isn’t there already, it’ll be coming soon enough.

Telstra should get a stack of new users who want Next-G’s speed and coverage through an ExpressCard solution. It’s a long awaited development that will make many people very happy.

But I just wish Telstra would be the leader here in realistic pricing and download limits for consumers, especially now with the faster download speeds and the most advanced mobile network ever, which should be better able to cope with more simultaneous users (something that was used to explain why cheaper prices weren’t offered previously as it would overwhelm the mobile towers).

But if 3 Mobile can do it with X-Series, Telstra can do it too. Surely they can. They just don’t have a real reason to yet, and might not have any reason, despite X-Series, to do anything until WiMAX comes along or 3 Mobile (or Vodafone or Optus or Virgin Mobile) unveils an even better deal of their own.

If Google can offer 2.7Gb of space for email, up from a revolutionary (at the time) 1Gb offering (when competitors offered 2mb for email), and with Yahoo recently offering ‘unlimited’ email storage to come, from memory, in early May, telcos can offer much greater wireless broadband download limits at much cheaper prices.

It will happen eventually, it’s already happening with Unwired, it’s supposed to happen with WiMAX and it’s started to happen with X-Series. One day, it’ll happen with Telstra too, but today is not that day. Today, Next-G comes to ExpressCard at last, and ExpressCard comes to Next-G.

That’s a very, very good thing – but just wait, wireless broadband users – the best is still yet to come. Prices are demonstrably falling on every network except Telstra's. For cheaper Telstra pricing, all we have to do is wait. And until then, either pay, and pay, and pay, or use a competing network at a cheaper price but miss out on the range and speed that Telstra offers.