STOP PRESS: Customers with unlimited data plans use more data than those charged up to £4 per megabyte!
We all know that the time leading up to Christmas and New Year is a very slow news period, but many mobile commentators including myself had a quiet chuckle when they read the story on the front page of the UK’s Financial Times on Christmas Eve 2007 – iPhone users raise network hopes.
Quoting the story from Andrew Parker:
“After years of false dawns for operators, the use of mobile phones for web surfing is on the verge of becoming widespread in Europe and the US, and iPhone research by O2 shows the device is acting as an important catalyst for such activity.”
What amazed me was the statement from Matthew Key, newly appointed CEO of O2:
“Here’s absolute proof that if you get the proposition right, customers will use data,” said Mr Key, who reached a deal with Apple for O2 to be the exclusive UK network operator for the iPhone.
What just 4 weeks of iPhone user data really points to (the iPhone launched in the UK on November 9th 2007) is that if you give subscribers data plans that are really unlimited (not capped at 200MB like other “unlimited” plans) then you will drive real usage. I’ll grant that the iPhone is a great device with a great user interface, so naturally it is easier for users to consume lots of data when the phone has a slick Safari browser and a YouTube link built in, but if the iPhone had not been mentioned then this story may have read
“Users consume more mobile internet when we don’t charge them up to £4 per megabyte for the privilege of accessing the internet when not at home”.
The telling statistic from the article was contained in the quote below:
“…However, the O2 research found that customers who have Nokia’s N95, the Finnish handset maker’s nearest equivalent to the iPhone, which runs on 3G networks, access markedly less data compared with those using the Apple device.”
Reason: N95 users don’t get an “unlimited” data allowance that the iPhone users get on O2 in the UK.
The other thing to be aware of is that this explosion of mobile data from 60% of iPhone users occurred on a 2.75G EDGE data network, which makes us think that all those non-iPhone 3G users are just plain scared of accessing the internet using their mobile because of horror stories like this that appeared at the same time as the O2 iPhone report:
Worker runs up £27,000 mobile bill
Even the Editor of Wired Magazine was the recipient of a $2,100 bill for using his iPhone abroad.
Ewan MacLeod from SMS Text News has been one of the strongest critics of O2’s data plans for some time now, and he was also amazed at the story in the FT.
Even a letter to the FT editor a few days after the initial story “Too bad O2, but iPhone is just a blip on the charts” followed a similar theme.
Now that the mobile internet is becoming mainstream users are becoming more aware that the mobile internet can become quite expensive. This need not be the case, and operators such as Vodafone are promoting the use of mobile internet offering web browsing for £1/day for up to 15MB or £7.50/month for 120MB, which follows on from the T-mobile web ‘n’ walk service that has been available for some time now.
Recently I was showing one of my colleagues the new Google My Location application and encouraged him to download it to his Nokia N95. He hesitated at first saying “I’m on a low data plan” – clearly worried about bill shock if the application consumed too much data.
The O2 iPhone story above helps fill the front page of the FT on a slow news week, but the fact remains that until all operators offer easy to understand mobile data tariffs, or generous data allowances (or truly unlimited in the case of the O2 iPhone plans) then mobile internet will be just for the people reading this blog – the early adopters who know exactly how to configure their handset for data, and the right data plan to select.
I have been an active user of mobile data since the very slow (and expensive) circuit switched data (CSD) at 9.6kb/s was available on the Optus network way back in 1997 (we all called it WAP), and have even been sending and receiving email on my mobile since before Blackberry was available outside the US. When I bought my first GPRS capable phone in 2001, I really started to use mobile internet for web browsing, even at 56kb/s. Now we can surf reliably at speeds between 300kb – 1MB on current devices and data cards but perhaps we take all this for granted.
As mentioned in my mobile industry 2008 predictions, mobile internet will come of age in 2008 as operators start to make the data plans flat as has happened in the UK and Australia with voice plans. As I looked around the mobile shops over the Christmas break, it seems like everyone is starting to offer “free landline” calls for the higher end tariffs – a precursor to the fact that landline calling will be free eventually for everyone. It looks like mobile data may go the same way (or at least be affordable for all users), and this can only be good thing as it will start to drive mobile advertising as users will be happy to accept a short video item promoting something that matches their profile – knowing it isn’t costing them a few pounds to download and view.
Postscript: Many people have tried to second guess what will happen with mobile advertising and the mobile internet forgetting we’ve actually seen this all before. Slower PC’s with painfully slow dial-up internet connections have given way to powerful laptops with superfast broadband speeds – making many a creative type jump for joy knowing they can deliver near-broadcast quality ads to a consumer’s desktop.
Now that mobile phones are becoming a powerful as early laptops, and we have High Speed Packet Access (HSPA) mobile data speeds that rival what is available to our homes we have the platform to launch fast, innovative mobile internet services. If only we had the tariffs to match and drive mobile application usage like O2 claims the iPhone has achieved for them in the first month then we would see the mobile internet become mainstream in less than half the time it took the “old internet” to reach a critical mass.