Indian telco association pushes for ‘floor tariffs’ on data pricing

In an open letter to India’s telecoms regulator, the Cellular Operators Association of India (COAI) has pressed for quicker decision making on pricing restriction rules.

The COAI is in a very interesting position currently. As an association representing the telecoms industry, it is tasked with responsibilities to lobby government authorities for favourable rules. But the question is what are favourable rules?

The association has three core members; Bharti Airtel, Vodafone Idea and Reliance Jio. Two of these members would like more stringent rules on pricing to protect their interests from the disruptive pricing strategies of the third, Reliance Jio.

Jio entered the market at the end of 2015 with data plans to undermine the traditional telcos and free phone calls for new customers. Bharti Airtel and Vodafone Idea suffered because of it and have been calling for more stringent rules to prevent the disruptive Jio from causing even more chaos and continuing to erode profits.

This is a painful position for a telco-neutral association to be in, though it is in favour of floor pricing.

“We expected an early decision by the Authority, on having the Floor Tariffs for the Data services,” Rajan Mathews, Director General of the COAI said in the letter to the Telecom Regulatory Authority of India (TRAI).

“While, we acknowledge that the recent situation on account of COVID-19 might have caused some constraints, however the Authority has started conducting the OHD through online process on various other topics. Accordingly, we request the Authority to kindly hold an OHD on this issue at the earliest.

“The industry is looking forward to an early conclusion on this important matter with great interest and we therefore request the Authority for an early decision on the same.”

The longer this consultation from the TRAI continues, uncertainty prevails. Uncertainty is the enemy of progress and investment in the telecoms industry. A speedy decision would be the biggest net gain for the industry, though it is questionable whether anything can be done quickly in the telecoms industry.


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Cost of data in China drops 93% as US still looks overly expensive

China telcos have slashed the average price of data over the last twelve months, though the US, South Korea, New Zealand and Canada are still look incredibly expensive.

While there is no perfect price for data tariffs as the nuances of each market vary quite considerably, looking at the data provided by Cable.co.uk, it is becoming clear that some markets are better at managing the cost of connectivity than others.

It is always worth remembering that despite telcos stating they would like to give consumers as much as possible, they will charge as much as deemed tolerable for wallets. Consumers are only valuable to telcos when they pay enough money.

Average Price per GB – select countries (USD, $)
Country Global ranking Price per GB Year-on-year
India 1 0.09 -65.4%
Italy 4 0.43 -52.3%
China 12 0.61 -93.9%
Australia 16 0.68 -62.5%
France 30 0.81 -62.9%
Thailand 51 1.23 -55.8%
UK 59 1.39 -79.1%
Spain 75 1.81 -52.2%
New Zealand 180 6.06 -38.2%
USA 188 8.00 -35.4%
South Korea 202 10.94 -27.7
Canada 209 12.55 +4.3%
Cuba 212 13.33 +5.7%

Source: Cable.co.uk

“Many of the cheapest countries in which to buy mobile data fall roughly into one of two categories,” said Dan Howdle of Cable.co.uk.

“Some have excellent mobile and fixed broadband infrastructure and so providers are able to offer large amounts of data, which brings down the price per gigabyte. Others with less advanced broadband networks are heavily reliant on mobile data and the economy dictates that prices must be low, as that’s what people can afford.

“At the more expensive end of the list, we have countries where often the infrastructure isn’t great but also where consumption is very small.”

This explanation from Howdle is reasonable, but it begs the question as to why some countries are at the north end of the scale, the US, Canada and South Korea for example.

The US is of course a significantly larger country than some which are further up on the list, but the small number of major MNOs allow for scaled economics with larger subscriber bases. Canada is a very large country, but the population is concentrated into smaller regions. South Korea is another unusual one, considering roughly 20% of the population is located in the capital, Seoul.

There will of course be numerous explanations and incremental contributing factors, such as wealth of the nation or cost of spectrum licenses, but then again there will also be nations with similar demands who are offering significantly cheaper data.

One reason data is more expensive in some places might simply be because these telcos are able to charge more. In the absence of a rival offering a disruptive pricing plan to bring down the cost of data, the telcos will charge as much as they can to be as profitable as possible.

KDDI and Softbank join the network sharing craze as Rakuten risk rises

Japanese telcos KDDI and Softbank have inked a network sharing partnership to ease the commercial pressures of connectivity in the rural regions.

Network sharing agreements are becoming increasingly common, perhaps one of the more prominent trends of 2020, owing to the financial pressures being placed on the telcos. With 5G and full-fibre projects on the books for many telcos, deploying connectivity infrastructure in the more sparsely populated regions, were ROI is significantly lower, is a tricky spreadsheet to balance. Telcos are increasingly looking to network sharing partnerships, to ease the financial burdens of building the foundations of the digital economy.

The new company, which will be known as 5G Japan Co, will be managed by co-CEOs Noriaki Terao (seconded from KDDI) and Eiji Otaki (seconded from SoftBank). With each telco owning 50% of the company, the network will reach out into the rural regions to provide suitable densification of 5G base stations for the 28 GHz and 3.7 GHz airwaves.

While network sharing agreements to create a more attractive ROI are not uncommon, perhaps there is more demand in Japan than many other nations. These are telcos who may have to deal with a very significant disruption in the shape of Rakuten.

As the poster boy for the open movement, Rakuten is building a network as many telcos would love to; a greenfield project, completely disassociated from the concept of legacy technologies and systems. This sort of network deployment is a dream come true for any telco and has the potential to offer significant benefits.

Firstly, it has been claimed the network can be run with only 350 employees, a fraction of the workforce running competitors’ networks. Secondly, it could be significantly cheaper to construct, thanks to Rakuten’s embrace of the OpenRAN movement. And thirdly, due to the acceptance of openness, upgrades should be faster and cheaper. This is the sort of network which everyone would build if they could start from scratch tomorrow.

There is still plenty which could go wrong with Rakuten’s business. The network could fail, or it might not be as successful as hoped in teasing subscriptions away from rivals, but the threat is very real for the Japanese telco industry. With investments substantially reduced for network construction, maintenance and upgrades, the demands on ROI are lessened. Rakuten is suddenly afforded a lot more flexibility when it comes to pricing.

At the beginning of March, Rakuten unveiled its ‘UN-LIMIT’ 5G data tariff costing 2,980 Yen per month, roughly half of what rivals have been offering. What is worth noting is that when customers are out of range of a Rakuten owned base station, a 2 GB download limit will be introduced as well as data throttling. This will be a disadvantage for the telco as it is rolling out its network, though the risk of pricing disruption is very clear.

Reliance Jio in India has already demonstrated how a market can be turned upside-down if a disruptor is allowed to gather too much momentum. This is a lesson which the likes of KDDI, Softbank and NTT Docomo should be learning as Rakuten comes online; new initiatives will have to be introduced across operations to realise efficiencies.

Without these initiatives, network sharing partnerships being one, the traditional Japanese telcos will not be able to sustainably compete with the Rakuten tariffs.

Italian telcos fined for pricing collusion

Telecom Italia, Fastweb, Vodafone and Wind Tre have been fined a total of €228 million after an investigation found the four telcos had co-ordinated price hikes for consumers in 2017.

The complaints against the four telcos had been raised by Iliad, a fifth service provider in the market, as well as Onlus CODES Association and Altroconsumo, two consumer rights groups. The investigation has now been formally concluded with Telecom Italia taking a €114 million fine, Vodafone €60 million, Wind Tre €39 million and Fastweb €14 million.

Telcos are of course allowed to raise prices as they see fit, though when it is done in such a collective manner to prevent churn and competition, regulatory authorities will become nervous.

In this case, the Italian Competition Authority (AGCM) found the telcos aligned their commercial activities which violates item 137 of the Italian consumer code, though it is somewhat of a complicated story.

The Italian telco decided to move from a monthly billing cycle to a 28-day one in 2017, though as the prices were not decreased during this transition. Consumer and advocacy protests focused on the 8.6% price hike which would be experience over the course of the year, as the telcos were effectively creating a thirteenth billing month.

In 2018, the telcos decided to pivot back to the monthly billing standard, though there would be a price increase to compensate for the shift. The consumers were back to square one but were paying more for the pleasure.

The AGCM has now concluded the co-ordination between the telcos allowed each to keep the inflated tariffs, made it unnecessarily difficult to compare tariffs and unfairly prevented the consumer from searching for a better deal.

While it is very difficult to 100% guarantee the consumer will be safeguarded from underhanded and nefarious corporate practices, the AGCM is at least dishing out fines which will make a material impact on the spreadsheets. The telcos will of course be able to afford these fines, but the amount will certainly make them think twice about trying this sort of thing again.

India explores minimum prices for telcos

The Telecom Regulatory Authority of India (TRAI) has unveiled a public consultation to decide whether it needs to set minimum prices for data tariffs in the country.

India has been one of the most interesting markets to observe over the last few years, though many of the emerging trends are seemingly having a negative impact on the health of the telecommunications sector. Thanks to disruption, the telco industry does not look very sustainable across the country and there is a very real threat to competition.

“Accordingly, the Authority has decided to float a consultation paper on the issue so that all the stakeholders in the value chain can get an opportunity to fully participate in the deliberations and give their views on such crucial issues affecting consumer interest,” TRAI has said in a statement.

“Considering this aspect, a consultation paper on ‘Tariff Issues of Telecom Services’ has been issued to invite comments from all the stakeholders, on various issues relating to tariff in telecom sector.”

Looking at the price of data, India has some of the lowest tariffs in the world. Although this might sound very attractive to the consumer, various other developments are placing the telcos under financial strain, most notably the spectrum bill being placed on Bharti Airtel and Vodafone Idea.

The Indian landscape is effectively the digital wild-west for the moment, with TRAI taking a very passive role. Reliance Jio’s aggressive pricing plans might have been the catalyst for the drive towards digital, though it should not be allowed to continue on this path. If Reliance Jio is allowed to continue to undermine profits at its rivals in such a destructive manner, the country might head towards a telco monopoly.

This is the first step in the process, though TRAI will have to be proactive and aggressive in its consultation. Vodafone Idea has already floated the threat of withdrawing from the market, and it does appear the spreadsheets will only be able to continue in this manner for a short-period of time. The objective is to make money after all.

EE forced to backtrack on 5G data tariffs

It does appear EE has been forced into a rethink on 5G data pricing, as the firm launches an unlimited data offering to keep pace with rivals in the UK.

Like hamburgers at breakfast, the 5G tariffs didn’t look right to start with. The price points were too expensive for today’s cash conscious consumer who expects the world for tuppence. EE might have been first out of the gate to capitalise on the growing 5G euphoria and earn the right to boast about being first, but it has been forced to backtrack a little.

The only issue with being first is that you give everyone else a taste of what is on the table. Even if EE had nailed the proposition and priced it perfectly, it left the door open to be embarrassed by rivals to be undercut. If the aim of the game was to secure post-paid subs and look to long-term ROI, EE left itself exposed to a cheap shot.

That said, it has now seemingly rectified the situation.

When it first launched in May, prices were tiered depending on download limits. Not only did it not look practical, limits would be reached relatively easily, it was expensive. Admittedly the price of 5G devices were factored in, but with rivals presenting options which were easier on the wallet, a new approach was needed.

“If you want an unlimited data plan, you should get it on the UK’s best network, with the coverage and speeds that let you make the most of it,” said Edward Goff, Marketing Director at EE.

“Our new unlimited range offers customers the ultimate smartphone experience in more places across the UK than any other network, all with no speed caps and great swappable benefits like Amazon Prime Video and BT Sport.”

What is worth noting is that the unlimited offer for 5G-SIM only plans is still expensive.

MNO Price
EE £44 a month
Vodafone £30 a month
Three £22 a month
O2 Unknown

Each of the telcos have taken their own approach to data pricing. EE offers 5G SIM-only contracts for £44 a month in the most traditional manner. Vodafone has offered tariffs on speed tiers with the £30 a month tier offering the ‘fastest available speed’, which might vary dependent on where you are. Three is offering 5G connectivity for free for anyone who has an unlimited 4G contract. The £22 a month deal is SIM-only.

O2 is the only one not to release pricing for its 5G data tariffs, being the last to market, though it certainly has taken the opportunity to undermine the promising progress made by rivals.

Although few in the EE offices will be happy to backtrack and have a rethink on the unlimited plans, it does now look to be in a very competitive position. It is the most expensive, but it does have the best network and most consistent, high download speeds. If performance is the measure of success in the consumers eyes, EE is certainly hitting the right notes.

Another factor to consider is the ‘swappables’ element of these deals. For those who sign-up to a 12-month SIM-only deal on 5G for £44 a month, three ‘swappable’ content deals will be included. Each month, customers will be able to elect which bundled content services they desire, ranging from zero-rated video data or music, additional roaming locations, BT Sport or Amazon Prime Video.

The team could probably do with negotiating a few more partnerships as it does look a bit thin on the ground, though it is a reasonable offer.

What we are yet to see from EE is an aggressive push towards the convergence game. Executives have been giving the same presentation at conferences for years, promising a seamless connectivity experience for customers through mobile, broadband and wifi assets, though there doesn’t seem to be much activity on the marketing front to link-up these elements in one conclusive offer.

Either there is something in the pipeline or this is a case of negligence. The combination of EE mobile and BT’s wifi and broadband assets would create a connectivity offering few could dream to compete with. Three and Vodafone are plugging into the convergence game with their own fixed wireless access (FWA) offerings, but EE seems to be lagging here. The opportunity to make noise is there but the team seem to be enjoying the uncomfortable silence.

EE is arguably the market leader in the UK, though thanks to O2’s MVNO relationships it can claim to be the network with the most mobile connections running across it. With the unlimited offer, bundles, biggest and best network coverage and BT’s wifi and broadband assets, EE has an opportunity to nail itself down as the top mobile provider in the UK.

Trying to pick out the winner in the UK’s 5G race is starting to get very difficult.

5G pricing: the best is yet to come

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece, Jennifer Kyriakakis, Founder and VP of Marketing at Matrixx, explores best practice in the pricing of telecoms services in the 5G era.

The advent of 5G technology will bring a monumental shift in how traditional telcos operate their business. In the run up to full scale 5G deployments, many forward thinking telcos have launched digital brands. These are essentially 100% digital versions of their businesses packaged as a different brand. Many of them are using their digital brands to experiment with customer experience, service offerings, and business models that will become mainstream with 5G. The theorem: If we don’t have the pricing models and business infrastructure in place to properly extract value from a 5G offering, we’ll end up losing out to the next wave of OTT players. So let’s figure it out now, before the networks are in place.

As operators debate how best to price 5G, some early examples, such as Three in the UK are offering 5G at no additional cost to current 4G plans. The idea seems sound as a starting point, particularly as there is little 5G network availability and devices haven’t yet caught up. But does it make sense in the medium to long term, or do these tactics risk further devaluing the very asset that differentiates them? Are these early pricing models really strategies for 5G, or merely placeholders as telcos continue with transformation efforts that will set them up to compete with OTTs and digital players?

Operators have a powerful opportunity to create a competitive advantage with their 5G offering. Getting the pricing model right is a strong place to start. With the industry already throwing different pricing models at the wall, which one will stick?

The Pay-for-Speed approach

This approach started in some markets with 4G and while it’s simple and straightforward for the consumer, it also sets the precedence that speed is the only value lever telcos have to offer. For example, Vodafone became the first UK network to offer unlimited 5G data plans. Ditching the monthly data allocations, Vodafone offers three speeds; 2Mpbs, 10Mpbs and then the fastest speed possible. People have the choice on how fast they want to download or stream content.

If you are a super user or have a family of six who are always on their phones, it makes sense to pay for those faster speeds. If you are in retirement, don’t necessarily have a job in tech or could care less about YouTube, then having the choice for lower speeds may be a good option.

But is this model sustainable? When in the future, the amount of data – everything from gaming to connected home, health apps, IoT, streaming video and more -could outweigh the speed? Would an operator lose a revenue opportunity on super users who take advantage of accessing large amounts of data at the fastest speeds?

The Rewards approach

Others are taking an ecosystem approach banking on potential new revenue streams by creating value-added services, which often come to life through rewards-based programs. These programs offer incentives such as discounts, coupons and first-access to concerts and movies, to entice users and make the app experience more sticky. By building loyalty around an ecosystem now, as 5G services arrive they have established channel relationships with partners who will be leveraging 5G in the future for AR/VR services and are actively participating in the revenue chain.

Verizon’s Up Program is a great example of this, as they offer discounts and rewards on technology, dining, sports experiences and stage-side concerts. They tout deals monthly and even daily, driving people to check in on the app frequently. Once there, they encourage users to manage their services, often upselling them on new benefits.

By creating these rewards-based programs they are not only appealing to the next generation of users, but they are also creating a more valued relationship between consumers and their brand. This brand strategy is one that few operators have navigated successfully, but it is crying out for change in a new 5G era if operators expect to compete with OTT players.

The Marketplace & Bundled approach

Operators that create marketplaces are offering users opportunities to connect with friends, form inner social groups, gift data to friends, and also manage their plans in real-time. These marketplaces are highly sticky, driving customers to spend lots of time within the marketplace, which breeds more opportunities to sell products and boost revenue.

Another approach are operators who are choosing to bundle the price of data with a specific service. For example, if you want Netflix delivered in high-definition to your smartphone, you’ll pay a flat monthly fee for that service and the data will be included. These bundled-service options work well for a variety of value-adds, including VR gaming, augmented reality services, IoT of the home and more.

This sets the market up nicely for two-sided business models which will emerge with full scale 5G. Getting consumers used to paying carriers for services vs. network access is phase one to future multi-faceted models in which the carriage is monetized through different partners and models.

So have any 5G pricing models arrived yet?

While these offerings are all based on 4G today, they set the foundation for turning customers into high-engagement fans, in turn increasing their revenue streams.

5G introduces hundreds and even thousands of possibilities to utilize the network efficiently and generate additional revenue. Operators that are moving now to innovate and distinguish themselves from their competitors are setting themselves up to reimagine pricing for 5G and drive new revenue vs. defend against price wars and the resulting churn.

 

Pod 15 jul Jennifer croppedMATRIXX Founder and Vice President of Marketing, Jennifer Kyriakakis, brings deep expertise in both telecoms and software with roles ranging from complex systems delivery to technical sales to strategic marketing. Her 20 plus years of experience helping Telcos reinvent themselves has propelled the growth of MATRIXX into markets all over the globe.

Three set to cause more disruption with 5G pricing plans

EE is finding out first is not always best as Three is set to join Vodafone is offering more attractive 5G data tariffs.

When EE first launched its 5G tariffs earlier this year, it was as everyone would have expected; the MNO charged a premium, and a lofty one at that, the 5G connectivity. Vodafone undermined this position with an innovative approach, tiering on speeds not data allocations, and now Three will go one step further offering access to 5G connectivity at no extra cost to a customer’s 4G connectivity plan.

All new and existing customers will have access to 5G with no speed caps and at no extra cost on all contract, SIM only and PAYG mobile plans. There will be data caps if you have currently have a cap on your 4G plan, however SIM-only unlimited data plans start at £20 per month.

“The forthcoming months are going to be game-changing and with our unrestricted plans, we are looking forward to unleashing the full potential of 5G to all,” said Three CEO Dave Dyson.

The approach is a sensible one from Three and leans on the strategy put forward by T-Mobile in the US. 5G is currently seen as somewhat of a bonus for customers right now, due to the limited geographical coverage of the airwaves. Offering 5G connectivity for free will certainly attract some customers, who will just have to worry about getting a 5G compatible device.

“Three’s hand was likely forced to some extent by Vodafone’s initial disruptive and unexpected pricing strategy for 5G,” said Kester Mann of CCS Insight. “But its enviable spectrum holding places it in a commanding position to undercut any rival.

“More than for any other UK operator, 5G is crucial to Three. It represents an opportunity to reinvigorate the brand, overcome a negative network perception, achieve the scale it as long-for craved and push into other segments such as convergence and enterprise.”

This is where Three will have to be careful. With more of society migrating to digital, consumers will come to expect a more resilient and consistent experience from connectivity providers. This is where Three has fallen down in recent years.

In the latest Opensignal report, Three was battling it own for last place with O2 in the majority of the categories. It had the lowest availability scores, poorest for video experience, second-slowest on speeds and worst for latency. This will not be good enough in the 5G era and if this trend continues, it would not be surprising to see Three lose market share.

Three might have been able to disrupt the market on price during the 4G era, but that will not be enough to mount a serious challenge to market share in the 5G era. Consumer expectations will shift across to availability and experience soon enough. Three has an opportunity to make a genuine impact on the status quo, but it needs to kill off the perception (which has often translated to reality) that it has the worst network in the UK.

The stars do seem to be aligning for Three. Pricing looks to be right, it has the best spectrum out of the four MNOs, the UK Broadband acquisition has set it on the convergence path and its traditional customers are perfect for the 5G era. If it can create a network which competes with the best in the UK, the next couple of years might be a very interesting quest for Dyson and his cronies.

Vodafone UK edges in front with ‘wider pipe’ approach to 5G

It’s always difficult to offer a winning position before all hands have been shown, but Vodafone looks to have stretched a nose ahead in the UK 5G race.

For the moment, we can only really judge two of the four 5G propositions in the UK, though there have also been hints from Three. With EE launching its 5G assault last month, and Vodafone switching on this week, it does seem that the latter has re-found its mojo and could challenge leadership positions in the UK connectivity standings.

As it stands, O2 and EE are sitting very comfortably in the number one and two spots respectively. With 36% and 33% market share for mobile subscriptions, according to Ovum’s WCIS, Vodafone is a distant third with 20% and Three falls away with 11% in fourth. However, that can all change very quickly, it wasn’t long ago Vodafone was the clear market leader.

Looking at the current offerings from the UK MNOs, Vodafone does look to have a more attractive offering. On the subsidised handsets front, the two are pretty much on par with Vodafone being a little bit cheaper. However, the SIM-only offering might grab the attention of a lot of people.

This is a model which we think is much more suited in the 5G era. If you believe the technologists, delivering data over 5G networks is cheaper than 4G. This is down to efficiency gains on the spectrum front, as well as improvements to antenna and the introduction of new technologies such as Massive MIMO. If it is becoming cheaper to give data to the increasingly insatiable consumer, why not offer unlimited.

Tiering on speeds is a very interesting approach. Data usage is going up for every demographic, such is life as more aspects become digitised, but the variety of ways people consume that data is becoming increasingly varied. Some will only use the internet for browsing, some focus on video consumption and others are gamers. Each different experience can be satisfied by different speed limits.

What will need to be done over the next couple of weeks and months is educating the consumer. Most consumers think faster is always better, but sometimes this is not the case. The majority of consumers could get by with mobile connectivity of 10-20 Mbps, but many think they need the fastest possible connection.

If you are in an urban setting and not able to use the internet on your device properly, the immediate assumption is that speeds are not fast enough. This might be the case, but another explanation is that there are too many people attempting to connect through the same cell site. This is network congestion, its not necessarily anything to do with speed, but too many people are clogging up the digital highway.

This is where 5G can add benefits over 4G. Think of the ‘internet’ as a water pipe. Not only does 5G make the water flow faster, it makes the pipe wider to allow more water to flow through it. This should address the network congestion challenge in various places if more people are connecting more devices to the same cell sites.

With this concept in mind, Vodafone has built the speed-tiered options; all you have to do is work-out how you use your phone, decide on a suitable speed and then you never have to worry about using up your data allocation ever again.

The one criticism we have is the pricing, which you can see below:

Speed limit 2 Mbps 10 Mbps Fastest possible
Price £23 £26 £30

On the lower end of the scale, the 2 Mbps tier, we believe Vodafone has charged a bit too much. And on the upper-end, the telco probably could have charged more. The strategy appears to be gearing as many people as possible to the middle tier which effectively undermines the concept of having experience designed tiers in the first place.

The success of this initiative will entirely depend on whether Vodafone can educate the consumer on the basics on connectivity experience. The water pipe analogy is a good one to explain the difference between 5G and 4G, though it would also help to inform users of how much speed is required to do what.

How much do you need to use WhatsApp, watch YouTube or play Harry Potter; Wizards Unite, for example. The general consumer in the UK will not know the answer to this question, and unless they do, this Vodafone strategy will likely fail.

Vodafone and EE 5G tariffs point towards a new form of digital divide

If the technology industry wants 5G to change the world, placing prohibitive pricing on data tariffs is a strange way to go about it.

The count-down clock to 5G is heading towards the small numbers, and now Vodafone customers will be able to pre-order 5G-ready devices and decide on what tariffs they are able to afford. Unfortunately for some, the prices might prove to be too much of a premium for wallets to stomach.

Devices and various different tariffs are now available for pre-order through the Vodafone website.

Tariff Samsung Galaxy S10 5G Xiaomi Mi MIX 3 5G
5 GB Red Extra £149 upfront, £58 monthly £99 upfront, £50 monthly
15 GB Red Extra £99 upfront, £62 monthly £99 upfront, £54 monthly
30 GB Red Extra £49 upfront, £66 monthly £49 upfront, £58 monthly
60 GB Red Extra £49 upfront, £70 monthly £49 upfront, £62 monthly
25 GB Red Entertainment £99 upfront, £69 monthly £49 upfront, £61 monthly
50 GB Red Entertainment £49 upfront, £73 monthly £49 upfront, £65 monthly
100 GB Red Entertainment £49 upfront, £77 monthly £49 upfront, £69 monthly

All contracts set at 24 months

What is missing from the above table is a nod to Huawei. Vodafone has hit the pause button on devices from the under-fire Chinese brand. As with EE, Huawei’s 5G phone will not be sold through the Vodafone website for pre-order. It would appear this will be the case until the difficulties with the operating system and ecosystem are ironed out.

Despite these complications, the prices are what the prices are.

“Given its high-profile battle with EE to lead in 5G, I expected Vodafone’s initial tariffs to be punchier,” said Kester Mann of CCS Insight. “The entry £50 offer includes just 5 GB of data; on a 5G network, customers could quickly burn through that.”

Mann is absolutely correct; 5 GB will not last long given the promise of the 5G ecosystem and the usecases envisioned. However, upgrading to bulkier tariffs is perhaps cost prohibitive, potentially creating a new digital divide.

As it stands, the price is prohibitive for some. £52 as a starting point is a high barrier to entry. It seems only the privileged will be comfortable with spending so much on a connectivity contract, creating a society of ‘haves’ and ‘have nots’ and another potential digital divide.

Although there have been promises 5G tariffs will be priced on similar levels to 4G, the premium should come as little surprise. People will be prepared to pay for bragging rights.

It should also be noted EE has priced the connectivity options at the same levels. Vodafone have slightly undercut EE for 5G tariffs, but not by much. This is perhaps a situation which we should have expected. Until all four MNOs are on the market with a 5G proposition, threatening to steal valuable postpaid subscriptions, the price will remain lofty.

Tariff OnePlus 7 Pro 5G Samsung Galaxy S10 5G Oppo Reno 5G
30 GB, one swappable £64 a month, £50 upfront £74 a month, £10 upfront £59 a month, £50 upfront
30 GB, two swappables £69 a month, £50 upfront £79 a month, £10 upfront £69 a month, £50 upfront
60 GB, two swappables £74 a month, £30 upfront £84 a month, £10 upfront £69 a month, £30 upfront
60 GB, one swappable £69 a month, £30 upfront £79 a month, £10 upfront £69 a month, £30 upfront
120 GB, three swappables £79 a month, £10 upfront £89 a month, £10 upfront £74 a month, £10 upfront
100 GB, two swappables £74 a month, £10 upfront £84 a month, £10 upfront £69 a month, £10 upfront
10 GB, two swappables £59 a month, £170 upfront £69 a month, £130 upfront £54 a month, £170 upfront
10 GB, one swappable £59 a month, £70 upfront £69 a month, £30 upfront £54 a month, £70 upfront
10 GB, two swappables £64 a month, £70 upfront £74 a month, £30 upfront £59 a month, £70 upfront

All contract set at 24 months

As you can see, the prices are not consistent with the overall rhetoric of the industry. For many years, the industry has preached of democratizing connectivity, while 5G was supposed to be a technology which benefitted the masses.

At the moment, the risk of a digital divide is very apparent. The rich will get the benefits while the poor remain in the 4G-era. While the genuine 5G usecases are yet to emerge, this is not necessarily an issue. 5G offers little more than increased speeds right now, a premium which isn’t really needed with the applications and services which are currently on the market.

Over the next 6-12 months, Three and O2 will enter the fray with their own networks. This should cause the price of 5G connectivity to tumble. Hopefully at least, as the current state-of-play is a connectivity world which has been designed for the privileged.