Australian cellcos embrace (sorta) unlimited data plans

unlimited data
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Australian mobile operators Telstra and Vodafone Hutchison Australia launched unlimited data plans on Tuesday – although “unlimited” in this case means radically throttled speeds after users exceed their data caps.

Starting tomorrow, Telstra will be offering a 12-month “Endless Data BYO” plan at A$69 per month, for which subscribers get unlimited talk, text, MMS, Wi-Fi data at Telstra Air hotspots, and 40GB of mobile data.

Once they exceed 40GB, however, they will receive “peace of mind data” for the remainder of the month, which means data usage is still unlimited but with connection speeds throttled down to 1.5 Mbps. Telstra insists that’s still plenty of bandwidth to stream music and SD video, and of course all your social media apps will still work.

One other thing: Telstra adds that the 1.5 Mbps speed is best case – during busy or congested periods, the connection speed may be slower.

Meanwhile, Vodafone is launching its own unlimited plan a day earlier, and with three price packages rather than one. The A$60, A$80 and A$100 packages offer data caps of 40GB, 80GB and 120GB, respectively, after which connection speeds are also throttled down to 1.5 Mbps.

While throttling data speeds may or may not be in the spirit of what consumers think of as “unlimited data” – technically the limit has been simply shifted from the amount of data consumed to the speed at which you can download it – Vodafone’s consumer business unit director Ben McIntosh said the data caps were set deliberately high so that the risk of going over the cap in the first place is minimized, even for users who watch a lot of streaming video.

“Our $80 Unlimited Plan comes with 70GB data at our normal network speeds which is enough to stream every episode of Stranger Things ever made, every single month on Netflix,” he said.

Rival cellco Optus has been toying with unlimited data for the past couple of months with its “Unleashed” plan, which offers unlimited data but limits speeds for music and video downloads and streaming to 1.5 Mbps. Also, the plan is only available to select customers, so it’s still in the trial phase.

Unlimited data plans are growing more common across the region and elsewhere as cellcos attempt to lure consumers with promises that they need not fear running out of mobile data access before the next billing cycle. The key question is whether it’s good for the bottom line.

In the early days of 4G, analysts criticized “all you can eat” bucket plans that devalued monetizable data by practically giving it away. When US cellcos embraced unlimited data plans last year, several analysts said it might help lower churn but could hurt ARPU growth in the longer term. In India, where ARPUs are among the lowest in the world Reliance Jio’s unlimited plans famously disrupted the entire mobile market, sparking a wave of consolidation and questions about whether the business model was sustainable.

On the other hand, according to a report earlier this year from Strategy Analytics, unlimited data plans and zero-rating are resulting in massive data traffic growth, while operators in China and Europe who have implemented such plans are seeing a positive impact on ARPUs.

Strategy Analytics’ director of Service Provider Strategies Susan Welsh de Grimaldo noted that because mobile markets are different, cellcos need to evaluate their market environment, customer segment priorities and partnership options when forging an unlimited plan strategy.

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