Vodafone extends cheap data plan

Charles Wright
Monday, 17 December 2007 07:21

Opinion and Analysis

 While he described Telstra as the worst example - "their prices are so outrageously high" - Budde says that all the mobile operators have been protecting each other. "They haven't wanted to rock the boat because they're terrified of losing $1 to $2 billion in annual SMS charges. They've seen what's happened in Japan. There's no SMS business there, because everyone sends mobile emails.

"The other threat that's on their mind is once people can go to the Internet, they can use Skype and other VoIP services. That’s the other money element. The amount of revenue that the operators get from calls is gigantic, and if you bypass the mobile phone system through Skype, the price difference is so huge, compared to fixed calls. They are scared to death that they will lose a significant part of their revenue.

His survey of the European mobile scene indicated the first cracks in that market only a year ago, with Vodafone's voluntary agreement to cut outrageous roaming charges.

He says that with Optus and Vodafone announcing national HSDPA (High Speed Download Packet Access) coverage by the end of next year, the industry faced major competition to grow the market. The whole mobile market is about money, not about data. "This business is totally price driven. If you price yourself above the others, you are going to miss out." He said that the last 10 years had seen only marginal changes in the mobile market, and if operators were serious about entering the mobile data market, something has to be done."

The iPhone and Google's Open Handset Alliance has also put pressure on the Australian market. With a 3G version of the iPhone expected in the next 12 months, Australians would be faced with the realisation that they simply would not be able to afford to use the glamour devices in the same way as American owners. AT&T's monthly plans for iPhone customers starts at $59.99 - but that includes unlimited data, 450 minutes of voice traffic, 200 SMS messages, and 5000 minutes of voice traffic on nights and weekends.