Price war brewing in Australian mobile broadband market

Alex Zaharov-Reutt
Thursday, 29 November 2007 10:29

Opinion and Analysis

Vodafone have launched a 5GB monthly plan for 3.5G mobile broadband users in selected metropolitan areas of Australia at only $39 per month, challenging all fixed and wireless competitors for the December mobile broadband dollar.

Vodafone’s 5GB monthly download limit for users of Vodafone’s 3.5G Expresscard (with PCMCIA card adapter) and USB mobile broadband modems is a very interesting development for the wireless broadband industry.

Although 5GB per month is already on offer from Three and iBurst at $99 per month, and 12GB per month from Unwired using their PCMCIA card at $99.95 per month, Vodafone’s price of $39 per month (on a 24 month contract) for 5GB is an obvious breakthrough – just compare it to the 200MB that Telstra offers at that price, the 400MB you get for $34.95 from Optus or 1GB from Three at $29 or 2GB at $49.

It’s also significant that it’s a major telecommunications company with wide coverage making the move, just as Three’s X-Series mobile broadband pricing innovations were very significant.

Vodafone’s $39 for 5GB price point sets a new standard for realistic mobile broadband download limits, one that will inevitably be increased in the future, and easily appeals to students and renters, a business person at any level wanting affordable mobile broadband and anyone just wanting their own independent, wireless Internet connection.

But now that Vodafone have dropped the price for 5GB of data to such a low level, at speeds between 500kbps to 1.5Mbps for users in a range of major metropolitan areas across Australia, competitors will be under pressure to respond.

Tim Cowan, Data Marketing Manager at Vodafone Australia, said that: “This plan makes mobile broadband more affordable for many Australian customers and ends the traditional view that mobile broadband is the exclusive domain of business customers”.

Cowan continued that: “With a huge 5GB for only $39 – and, of course, no need for line rental – Vodafone’s new pricing hits the sweet spot for personal customers and will make it an easy choice for more business customers to capitalise on the benefits of mobility as they return to work in the New Year.”

The move towards larger mobile broadband download limits will see some users go totally wireless, choosing not to own a landline phone or a DSL or cable Internet connection, but using a mobile phone and a wireless broadband modem of some kind instead.

For those living in Vodafone’s coverage areas, including the major capital cities, the Gold Coast, Central Coast and the Sunshine Coast and all major airports, anyone wanting mobile broadband will be tempted.

Vodafone’s network also includes a GPRS network that provides voice and data to 92% of the population, and while Vodafone’s service will work in rural and regional areas where mobile coverage is available, it will only be at slower GPRS speeds, although it won’t come at any additional cost.

Vodafone is competing mainly with users who would otherwise choose Optus, Three, iBurst, Unwired and Telstra in coverage areas.

However Telstra still holds an ace up its sleeve against all competitors. Please read onto page 2 to see why... and why Vodafone's deal puts enormous pressure on competitors to respond...