Vodafone UK does its bit with free unlimited mobile data

In the spirit of collective endeavour Vodafone UK is offering unlimited mobile data for free to vulnerable customers and half a million others for a month.

Vodafone says is will be ‘proactively’ upgrading postpaid customers it identifies as vulnerable (which includes those who have declared disabilities and mental health issues among other things) by sending them a text message informing them of their eligibility. On top of that the first 500,000 customers who apply through the VeryMe rewards scheme via the app will also get 30 days of all-you-can eat data on the house.

“Our role in these difficult and worrying times is to keep the UK connected, even while we have to stay apart,” Vodafone UK boss Nick Jeffery. “We are offering 30 days of unlimited free data to our most vulnerable customers and the first 500,000 customers to sign up, to help ease any worries about running out of data or incurring additional charges.

“If our network capacity allows, we would love to be able to offer this to even more customers and will be monitoring the feasibility of this. In short, if we have more to give, we will. This is one of a series of measures that we are taking to help. We have already expanded our networks, given our customers free access to NHS online services and reduced the time it takes to pay small suppliers.”

Hopefully Vodafone will be able to extend the offer as, due to the lockdown, the vast majority of the country is presumably on wifi the whole time. While Vodafone will be feeling the pinch along with everyone else, these kinds of philanthropic gestures at a time of such collective challenge are welcome. The gesture comes the day after the country had a mass public display of gratitude towards its health service and will presumably be joined by many more.

Rakuten Mobile unveils disruptive tariff to shake up Japanese market

Ahead of a hard launch next month, new Japanese MNO Rakuten has announced an ‘unlimited’ tariff that massively undercuts the incumbents.

The ‘Rakuten UN-LIMIT’ tariff seems to borrow its marketing from T-Mobile US, but its core inspiration from Reliance Jio. Not only does it come in at 2,980 Yen per month, apparently less than half of what’s currently on offer, but Rakuten is also offering the first year of service for free to the first three million punters who sign up.

“For around two years, the Rakuten Group and Rakuten Mobile have been building a new network unlike anything the world has ever seen,” said Rakuten CEO Mickey Mikitani (pictured). “Everyone at Rakuten is working together to democratize the mobile industry. Rakuten will become the only major carrier in the world to offer a single pricing plan. Currently, we aren’t looking to launch any other plans.”

The unlimited side of things does come with a few caveats, however. You can see the full tariff table below, with its various qualifiers. A key thing for prospective Japanese punters to bear in mind is that as soon as they’re out of range of a Rakuten base station a 2 GB per month limit kicks in and data speeds are significantly throttled.

*1 Unlimited when connected to Rakuten Mobile’s base stations. Subscribers can confirm which area the data they are using is from via the My Rakuten Mobile home screen.
*2 If data usage in the partner area (domestic) exceeds the data allocation, data speeds in the partner area (domestic) will be limited to a maximum of 128kbps. Unused data will not be carried over to the next month.
*3 The partner area (overseas) refers to the 66 countries and regions where international roaming (data) can be used. If data usage in the partner area (overseas) exceeds the data allocation, data speeds in the partner area (overseas) will be limited to a maximum of 128kbps. Unused data will not be carried over to the next month. Usage from outside the 66 countries and regions will incur charges depending on the country/region.
*4 Additional data purchased can be used for 31 days. Additional data for partner areas in Japan and overseas must be purchased separately.
*5 Please check “2. Voice calling and SMS fees” below.
*6 From overseas, standard calls cannot be made or received, and standard SMS cannot be sent or received.

The party line is that Rakuten can offer all this lovely cheapness because its network, which it built from scratch, is just so damn efficient. “We are extremely delighted with what we have accomplished in Japan,” said Rakuten CTO Tareq Amin. “We have deployed the world’s first Open RAN platform, not because the phrase ‘Open RAN’ sounds like good technology, but because there are cost reductions that we feel an obligation to pass on to consumers in Japan.

“We are one of the only telecommunications networks that can claim to have standardized, 100% open interfaces, and full control of our software and network framework. This is something that we are so extremely proud of. Thank you to all of the employees and partners that made this vision.”

Right now Rakuten seems to only be covering a few major cities in Japan. While it has aggressive roll-out targets, subscribers outside of Tokyo, Nagoya and Osaka may be disappointed by how infrequently their connections are either free or unlimited. But this aggressive positioning is still bound to win over a lot of Japanese punters and put heavy price pressure on the incumbent MNOs.

O2 UK launches 5G network with no tariff premium

As the last UK operator to switch on its 5G network, O2 seems to be trying to make up for lost time by charging its customers no premium to switch from 4G.

The ‘new’ tariffs are the same as the old ones – i.e. you get the same amount of 5G data as you would 4G data, including an unlimited tier coming it at 40 quid a month. Initially only the following cities will have access to O2 5G and only in certain parts: Belfast, Cardiff, Edinburgh, London, Slough and Leeds. That will grow to 20 towns by the end of the year and 50 by the summer of next year.

“Today is a significant moment for our customers and our business as we switch on the O2 5G network,” said Mark Evans, CEO of Telefónica UK. “We’re launching with a range of tariffs that make it easy and fair for customers to access 5G, with flexible plans that cost no more than 4G. We’re also switching on 5G in important parts of towns and cities first, places where it will benefit customers and businesses most.

“I believe 5G is going to revolutionise the way people and businesses use mobile connectivity, unlocking huge possibilities for our economy and society. No one in the country has all the answers today, but I’m excited about getting it into the hands of our customers and working with leading partners to help shape the future of 5G for the next generation.”

Here are the tariffs, with the second one including some kind of virtual reality music service:

O2 UK 5G launch tariffs

Custom plans along with O2 Priority are important features that resonate with its customers,” said analyst Paolo Pescatore. “These will be paramount in the future in maintaining its customer centric leadership in the U.K. Expect content to feature more prominently in the future as it seeks to broaden O2 Priority for customers.”

The decision to charge no premium for 5G seems sensible as there is little incentive for them to pay it while the network rollout is still in its infancy. Instead 5G will become table stakes over the next year or so and the usual differentiation challenges will apply. Whether or not VR music will be a significant one remains to be seen.

Another petition appears to delay T-Mobile/Sprint merger

Nine organizations have come together to petition the FCC to delay any permissions to approve the T-Mobile US and Sprint merger until a fraud investigation has been completed.

The petition is focused on a Sprint probe, relating to alleged Lifeline fraud. The under-fire telco has been accused of collecting subsidies from the FCC even though many of the subscribers through the initiative were inactive and not using the service.

“Specifically, the public interest, rural wireless, and labor organizations ask the Commission to pause its review of the merger while important issues related to Sprint’s apparent Lifeline fraud are more fully investigated by the Commission, and also urge the Commission to seek public comment on the DISH waiver requests, the July 26 Dish commitments to the Commission, and related developments, including the DOJ Consent Decree,” the petition states.

The petition has been filed by the Rural Wireless Association, the Communications Workers of America union, Consumer Reports, The Greenlining Institute, the Institute for Local Self-Reliance, New America’s Open-technology Institute, The Rural Broadband Association, the Open Markets Institute and Public Knowledge.

Should the FCC agree with the petitioners, the completion of the merger would be paused until the end of the investigation.

Although T-Mobile US and Sprint have been making progress towards completing the merger, there are still numerous hurdles which will have to be negotiated. The FCC and Department of Justice have green-lit the deal, with concessions to be fulfilled, though that does not mean the law suits will disappear.

Aside from this petition, 16 State-level Attorney Generals have banded together to file a lawsuit against the merger. Led by the ambitious New York Attorney General Letitia James, the lawsuit questions the validity of the merger on the ground of competition. James has argued that with the presence of four MNOs, tariffs are becoming less expensive and coverage is improving; connectivity is getting better for the consumer with the status quo, so why should this be changed?

The nine organizations filing this petition to the FCC are demanding the merger be delaying which the fraud investigation into Sprint is on-going.

The Lifeline Program is designed to offer subsidies to telcos to enable free tariffs for low-income consumers across the country. Participants receive $9.25 a month on average, though Sprint is accused of collecting the pay-out for 885,000 inactive Lifeline customers. This number represents 30% of the Lifeline subscribers Sprint supports.

“It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing,” FCC Chairman Ajit Pai said at the time. “This shows a careless disregard for program rules and American taxpayers. I have asked our Enforcement Bureau to investigate this matter to determine the full extent of the problem and to propose an appropriate remedy.”

Under the rules of the programme, providers of the service may only be reimbursed for a Lifeline subscriber if that subscriber has used the service at least once in the past 30 days. The onus is placed on the telcos to de-enroll inactive subscribers, though it does appear something went very wrong at Sprint.

Considering the investigation is being powered by the FCC, the petitioners might find some joy with this latest effort to de-rail the merger. It might be nothing more than a pause on developments, but it does afford more opportunity for other opponents to gather momentum.

iPhone gets the official nod of approval for tariff exemptions

For those who are facing uncertainty over the potential introduction of tariffs on products and components originating in China, the confirmation of Apple’s exemptions will perhaps rub salt into the wound.

Although the idea of preferential treatment is a stretch, a lot of good things do happen to Apple. With new tariffs looming on the horizon, Apple has received approval for 10 of the 15 applications it made for exemption. Details are thin on the ground for the moment (the US Trade Representative website had crashed at the time of writing), the damage which would be inflicted on the iLeader’s Mac Pro computers.

Dedicated Apple followers will now breath a sigh of relief as the prospect of increased costs being passed onto the consumer are much lower. Apple will have to swallow some additional costs, not every application was approved, but the impact will now be limited.

The Apple issue is a relatively complicated one. Although the Mac Pro products are assembled in the US, many of the components are manufactured in China. For example, partially completed circuit boards are imported to a plant in Texas for the final product to be assembled.

Texas does appear to be an interesting element in this story…

On July 26, President Trump tweeted “Apple will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!”, before going onto explain the next day that Apple was considering opening a manufacturing plant in Texas as a means to avoid the financial penalty. The claims followed meetings between the President and Apple CEO Tim Cook, but Apple is yet to make any announcement which would resemble what Trump is claiming.

In fact, during the last earnings call, Cook suggested the tariffs presenting a significant problem for Apple. The current set-up was not necessarily feasible, with some fearing these comments meant production could be moved out of the US completely.

Much of Apple’s manufacturing supply chain is currently located in China. One reason for this will be the cost of labour, land and local materials, but it is worth noting that China has skillset which cannot be replicated in the US. China is a hotbed for the worldwide manufacturing industry, and such, careers like Precision Tooling have thrived while they have suffered elsewhere. Sourcing talent outside of China is as much of a supply chain headache as swallowing the cost is.

While an unknown number of companies will be sweating over the seesawing nature of the US/China trade relationship and potential tariffs, Apple seems to be coming out unscathed at each turn in the road. With these exemptions, and the delay of the tariffs which would have impacted the production of the iPhone, the Apple lobby seems to be working very effectively.

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.

Ofcom moves in to protect UK mobile users from loyalty punishments

The UK’s telecom regulator believes out-of-contract mobile users could have saved millions if telcos offered the best deal available, and has released new measures to protect them from being treated unfairly.

After nearly a year’s research the regulator has found that on average the out-of-contract customers, those who have taken out a handset/airtime bundle contract and stay with the operator after the contract runs out, are paying £11 more per month than if they have been offered a better alternative, e.g. a comparable SIM-only deal. This would take the total amount of over-payment made by the 1.4 million out-of-contract customers to £182 million a year.

“Our research reveals a complex mobile market, where not everyone is getting a fair deal. So we’re introducing a range of measures to increase fairness for mobile customers, while ensuring we don’t leave existing customers worse off,” said Lindsey Fussell, Ofcom’s Consumer Group Director.

The new measures introduced today, published in a release titled “Helping consumers to get better deals in communications markets: mobile handsets”, focus on three areas:

  1. Transparency of contract details: mobile operators offering bundle contracts should tell customers the cost of the handset and the cost of airtime separately. This is in line with new EU rules, but Ofcom has decided to introduce it to the UK despite  the decision to leave the EU.
  2. Time limit on “split contract”: this refers to the kind of contacts that a customer would pay for the handsets and usage separately. The new rule would cap such contracts to 24 months, to avoid customers being locked in one contract for to long and to make switching operators easier.
  3. Concretised measure to treat customers fairly, following the more vague “Fairness for Customers” commitment the operators signed up to. Specifically, it requires mobile operators to tell customers that their contract is going to end, and to explain to them the best available deals including SIM-only deals. The easy way of switching operators with a text message that was laid out in June is also coming into effect this month.

Ofcom also declared the first victories in operator endorsements. “All the major mobile companies – except Three – will also be reducing bills for millions of customers who are past their initial contract period,” Fussell said.

O2 and Virgin Mobile will charge their out-of-contract customers the equivalent 30-day SIM-only deal, while both EE and Vodafone are going to reduce the price for their customers out-of-contract for more than three months, though they will only confirm the level of discount by the end of the year. The discount will become effective next February.

“Three is the only major provider that has refused to apply any discount to its out-of-contract customers. As a result, these customers will continue to overpay and will not receive similar protections if they stay on their current deal,” the Ofcom statement said.

The regulator also announced that later this year it will publish its findings on broadband prices, and why some customers find their broadband bills higher than others.

DT gets slap on wrist for net neutrality naughtiness

Deutsche Telekom has found itself on the wrong side of right after its ‘Stream On’ offering was found to break European net neutrality rules.

After the Federal Network Agency (BNetzA) imposed restrictions on the telco on the grounds of net neutrality, DT took to the courts to fight the decision. Unfortunately, the lower courts and today in the Higher Administrative Court in Muenster, it was confirmed the telco would no-longer be able to offer the ‘Stream On’ value add feature in its current form.

The issue which the telco is facing boils down to the small print. DT customers have found themselves to have traffic throttled and are unable to make use of the ‘Stream On’ feature outside the German borders, violating European rules on roaming.

‘Stream On’ was first introduced to customers in the US, with the German business following suit after witnessing the success. Offering zero-rating benefits on video streaming, the proposition proved to be as successful in Europe, with two million German customers signed up.

It is of course a strategy which will sound attractive to the data-intensive consumers of today. With entertainment and gaming content from selected partners not bleeding the monthly data allotments, it sounds very interesting, however it seems DT is a victim of its own sluggishness.

One of the issues which BNetzA found was on the data throttling side of the offer. For cheaper data tariffs, download speeds were throttled with the critics arguing this violated one of the key principles of net neutrality, irrelevant as to whether the user consented to the downgraded speeds.

For the tariffs at the bottom end of the scale, download speeds had been throttled to 1.7 Mbps. This might have been sufficient at some point, but at this is not fast enough to deliver a HD quality resolution, the courts decided it was undermining the rules.

Secondly, in limiting the zero-rating offering of ‘Stream On’ to its own borders, DT has also been found to have broken European roaming rules. As the free data stream ended at the border, the courts agreed with regulators that the user was effectively being ‘charged’ for using video and gaming services when in another country. Charging more for services while abroad is a no-no when it comes to the European Union’s rules on roaming.

Although the telco will not be happy with the outcome of this case, it is not the end for the ‘Stream On’ proposition. With two million users signed up, it is clearly at attractive value add for DT, but the telco will have to tweak the small print and update some permissions to ensure it is compliant with current regulations.

France next on the list to be teased with Trump’s tariffs

The United States Trade Representative (USTR) has opened an investigation into France’s digital sales tax, a move which could lead to the European nation facing trade tariffs.

The digital sales tax in France has been viewed as a means to force internet companies to play fair. The creative accounting practices of these companies has ensured nominal tax has been paid to various European states, and France has had enough. The proposed tax has passed through the lower parliamentary house, the National Assembly, and is expected to get the final thumbs-up today from the Senate.

As a result, US Trade Representative Robert Lighthizer has announced the launch of an investigation under Section 301 of the Trade Act of 1974 of the Digital Services Tax (DST) into the French government. This is the very same tool used by the Trump administration to justify the introduction of tariffs against China due to the alleged theft of IP.

“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” said Lighthizer.

“The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”

What is worth noting is that while many US companies might find themselves paying more tax, this is not necessarily a move to raid the US economy. This tax has been directed towards all digital companies who abuse the international tax system to the detriment of the French government and society irrelevant as to their nationality, it just so happens the US dominates the internet industry.

Many will view the French move as a gallant effort to hold the internet economy accountable, though it seems the US does not feel the same way; its own economy and society does of course benefit from the tax skulduggery.

The suggestion of the US imposing tariffs on the US comes two days after President Trump declared Indian tariffs on US goods should be a thing of the past.

The tax itself has been in the pipeline for some time, as European nations have become increasingly frustrated by the taxation strategies of the digital economy. Companies such as Google, Facebook and Amazon have been shifting profits freely throughout the world to ensure lower taxation rates are paid. This move from France, to impose a 3% sales tax on revenues realised within its borders, seems like an effective counter-punch.

What is worth noting is it is not just the US firms who are abusing this taxation system. Sweden’s Spotify is another which has played the system well. In the UK, as an example, the company reported revenues of £444 million over the course of 2017 but paid £891,425 in tax as it only reported advertising revenues in the country. Revenues associated with the ‘Premium’ subscription product were moved to Sweden where it could pay less tax.

France is not alone with its frustrations either. The UK is another nation which is considering its own digital tax reforms, while the European Commission attempted to pass bloc-wide rules recently. These rules were blocked by the likes of Ireland and Luxembourg, two countries who benefit significantly from the fleecing of other nations.

Now onto the US response. Section 301 and related provisions of the Trade Act offer the USTR the opportunity to investigate what it or the White House deem as a foreign country’s unfair trade practices. There will be a public consultation and lobby efforts from Silicon Valley and should the USTR conclude France is unfairly persecuting US business, tariffs could be directed towards imported cheese and garlic.

Tariffs are a popular weapon for Trump and the White House hacketmen on the international trade scene, as it is becoming increasingly common for US diplomats to huff and puff, while banging their chest and showing off their biceps when things don’t go their way.

Unfortunately, the US doesn’t really have a leg to stand on here, though the presence of logic will not persuade the hawks from their flightpath. Internet companies, all over the world for that matter, are taking advantage of a dated taxation system which allows them to grow bank accounts without recontributing to the country which has fuelled this prosperity. There is little which can be said to counter this position.

Interestingly enough, the move could spark wider tensions. The relationship between the White House and the European Union is already stressed and targeting a single member state might not be received well by the bloc. The US feels targeting a single member state is legitimate, though there might well be a bigger conversation to be had in Brussels.

With the clouds of tariffs already lurking above the European automotive industry, the US might find itself with another trade disagreement on its hands before too long.

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.