Vodafone ‘rips up the rulebook’ with new 5G pricing model

With EE claiming the ‘first’ accolade many telcos seem to think is critically important, Vodafone needed to do something different to gain attention; this pricing move might well be an important one.

The idea is simple. Instead of tiering pricing plans on monthly data allocations, unlimited data packages can be purchased with tiered limits of speeds. Customers can select the package which is best suited to the way in which they use their devices.

This approach is certainly an interesting one and certainly has the potential to disrupt the status quo. Vodafone is not the telco giant it once was in the UK. It sits third in the market share ranking for mobile subscriptions and is a comfortable distance away from the top two. However, a new approach to pricing might get the team back to its former glory days.

Brand O2 EE Vodafone Three
Market share 36% 33% 20% 11%

Statistics from Ovum’s World Cellular Information Service (WCIS)

With ‘Unlimited’ data plans, the tariffs are designed with 5G in mind. Vodafone UK CEO Nick Jeffrey pointed out that 5G is much more than a smartphone. A tsunami of devices will be connected to the network soon enough, and consumers will be digesting data in new ways; the last thing 5G consumers want to worry about is reaching a monthly data allocation.

“These tariffs are perfect for the over-the-top generation,” said Consumer Director Max Taylor.

Instead of tiering tariffs on consumption allocations each month, customers will be able to subscribe to download speed limits, with unlimited data pools. As you can see below, there are three tiers to take into consideration.

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Taylor suggested each of these tiers have been designed with experience in mind. The slowest, with a maximum speed of 2 Mbps, is for those who do little more than message, browse the internet or distract themselves on social media. The next tier is for those with an average data appetite; 10 Mbps is more than enough to run SD video on the go, while the final tier is for the heavy data consumers, gamers for instance.

Although this is a very interesting approach for Vodafone, what is worth noting is this is not the first time this pricing structure has been used. Elisa in Finland has been tiering its data plans on speed limits for years, but this should not take away from what is a very interesting switch from Vodafone.

“Vodafone’s move into unlimited data and its decision to price 5G the same as 4G indicate the emergence of a challenger mentality,” said Kester Mann of CCS Insight. “This is in sharp contrast to its traditional premium-focussed approach. It could spell bad news for Three, which has built a strategy based on challenging industry norms.”

One party which will not be happy with the news is Three. Over the coming months, the ‘challenger’ telco will be launching its own 5G proposition and we suspect it might be brewing up its own disruption. As Heavy Reading’s Gabriel Brown noted to us at the launch event, such an announcement from Vodafone might ‘steal some of the wind from Three’s sails’.

What is worth noting is the ‘Unlimited’ tariffs will only be available for SIM-only customers. You can see the pricing tiers for subsidized handset contracts at the bottom of the article, there is some opportunity for competitors to undercut Vodafone.

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Finally, Vodafone is taking a page out of the BT playbook by tackling the connected everywhere challenge. In launching its ‘5G Gigacube’ FWA product, the team are also supplying a convergence tariff to allow for seamless connectivity everywhere and anywhere. And for £50 a month, with an Amazon Alexa smart speaker included in the bundle, it is an attractive proposition.

Like Three, Vodafone is looking to challenge the traditional home broadband market. The FWA offering doesn’t need a landline or an engineer to hook-up the equipment, it is a simple and cheap alternative to fixed broadband. With home and mobile broadband, both 4G and 5G, bundled in with an Amazon Alexa for £50 a month, this might turn a few heads.

If Vodafone is to make moves in the UK connectivity market, it needs to do something different. This is what the last couple of years have all been about, turning the oil tanker. It now has a new converged network, Redstream, more legacy IT systems are being switched-off each year, nine more in 2019, and the financials have returned to growth for the first time in five years. When you add in the new pricing model, convergence strategy and innovation hubs to bolster the enterprise business, things are looking positive for Vodafone.

After giving up its market-leading position years ago, Vodafone is starting to look like a business which can challenge at the top of the UK connectivity market once again.

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.

EE 5G hits the ground running

Sneaking in-front of Vodafone to debut on May 30, EE’s 5G proposition will be launched across six cities in the UK with a range of different devices and interesting bundling options.

While the launch of the network was announced last week, BT Consumer CEO Marc Allera gave much needed colour to the deployment plans at a media event in London and to be fair to BT and EE, it does look pretty impressive.

From today, customers will be able to pre-order bundles from EE as well as choose from multiple devices. The Samsung Galaxy S10 5G will of course be one of the options, though customers will also be privy to exclusive deals with the Samsung Fold, Oppo Reno 5G and the LG V50 ThinkQ, as well as Huawei’s FWA device and the HTC 5G Smart Hub.

While all of the devices certainly promise a lot, the LG approach is perhaps the most interesting. The device itself is pretty much as you would expect, though a separate module is also included, allowing the device to be clipped in to add an extra screen (as you can see below). Head of LG Mobile UK Andrew Coughlin said the product has been designed with multi-taskers in mind, with each screen working independently of the other.

The device also has the potential to open up entirely new experiences when it comes to gaming.

LQ Images

What you will not see over the next few months is a Huawei device launched in partnership with EE. Allera suggested the pause button has been hit on this relationship, due to the difficulties the firm is facing with its Android licence. If EE cannot guarantee performance of the device throughout the customers mobile contract, it will not partner with Huawei.

But onto the launch itself, six cities will experience the 5G euphoria on Day One, with another 10 added to the mix over the remainder of 2019. Building on the already completed work, EE plans to upgrade 100 base stations to 5G a month, taking the total to 1500 by the end of 2019.

“Today is Day One of our 5G journey, we are going to be the first in the UK and one of the first in Europe to bring our customers 5G,” said Allera.

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Always connected is not a new concept from EE, though it would not be a surprise to see the message ramped up over the next couple of months. With 4G, broadband, wifi and, soon enough, 5G, EE has a lot of connectivity assets to shout about. When you combine these different segments with the largest geographical 4G coverage of all the UK MNOs, this is a selling point which would genuinely interest our internet-obsessed society.

That said, advertisements will need a bit of ‘sexing up’ if they are to catch the attention of the mass market.

On the speeds side, it does look like EE will be launching its 5G network with the ambition of reaching 200 Mbps. However, the message will be more focused on reliability and consistent experience as opposed to peak speeds.

“Peak speed might be the headline, but it is not the story,” said Allera.

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Creative tariffs and bundling are where EE might be able to attract the most attention. 5G customers will not only gain access to faster download speeds and more reliable connections but will get the option to choose from various different zero-rating options to make the most of the connectivity euphoria. These options can be swapped out as the customer desires.

Finally, EE will be also be the exclusive partner of Niantec for the highly-anticipated follow-up to Pokemon Go; Harry Potter, Wizards Unite. Although Pokemon Go was a bit of a sham when it came to delivering on a genuine augment reality experience, the Harry Potter game looks much more immersive and truer to the definitions of AR. Considering the popularity of Pokemon Go, Niantec could certainly be onto another winner should it be able to nail the AR experience with this new title.

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What is worth noting, is this is only the first phase of the EE 5G strategy. The aim will be to have 5G present in 50 cities across the UK by this time next year, though in the first phase it will only be in the busiest areas. Although the geographical rollout will be quite limited, 8% of base stations will be 5G, these assets will deliver 25% of the total traffic running across the EE network.

The second phase of the deployment, starting in 2022, will see the rollout of EE’s brand new 5G core, as well as the introduction of new spectrum. This will be when the UK will be able to experience a genuine 5G network, with the prospect of cloud gaming, AR and immersive content living up to the promise. The final phase, 2023, will see the introduction of mission critical applications focusing on the low-latency angle of 5G.

Interestingly enough, despite all the criticism faced by Huawei in the press, EE will be launching its 5G proposition with Huawei at the core of the network. This is unavoidable and will only be temporary, EE will gradually phase out Huawei from the core, but it is a fact which has seemingly been overlooked or cleverly managed out of the public domain by the BT PR team.

5G is about to become very real for the consumer and soon enough there will be a battle between the MNOs to fight for attention. EE and Vodafone might be scrapping for the 5G lead right now, but this approach from EE looks very promising.

Ofcom outlines plans for 2019/20

With the country on the verge of realising the promise of the digital economy, the pressure is still on Ofcom to make sure a fair and sustainable landscape is developing. Here, the team outlines its plans for the next twelve months.

“It’s a great way of being able to explain why our work matters and what some of the areas are we want to give a particular focus to,” said Ofcom CEO Sharon White. “And it’s also a way of being able to be held accountable for those areas.

“This year we’re talking about two big consumer themes. Fairness for customers, how do we make sure whether your getting broadband or mobile, you’re getting a great deal, a fair deal from your provider, and the other big these is better broadband, better mobile wherever you live.”

The plan itself actually focuses on four areas. Firstly, better connectivity. Secondly, fairness for customers Thirdly, supporting UK broadcasting. And finally, raising awareness of online harms.

Starting with better connectivity, over the next 12 months the Government’s planned universal broadband service will be getting more attention, while the team will continue to focus on opening up access to BT’s network of underground ducts and telegraph poles. Addressing the mobile not-spots, more airwaves will hit the auction lots and it would be a fair assumption more coverage obligations will be heading towards the telcos.

On the fairness side, work will continue to ensure operators are being more transparent when informing customers about the best available deals and tariffs. One area which has been prioritised is for those customers who pay for their handsets bundled with airtime, or those who pay more because of their contract status.

Looking at UK broadcasting, the message here seems to be value for money and ensuring public service broadcasting is still fit for purpose. A lot has changed over the last five years, look at the growth of OTT streaming services and downfall of linear TV, and there is a feeling something needs to change to ensure public funds are being spent in the best interest of those who pay the taxes in the first place.

Finally, in terms of the final part of the programme, this will be a tricky one. There is of course a need for consumers to be more aware of the dangers of the digital economy, but this is an area which has been largely ignored to date. No-one is particularly to blame here, as without the consequences it becomes very difficult to educate on dangers and be taken seriously. That said, there have been plenty of scandals and data breaches in recent memory to give Ofcom ammunition.

With the 5G dawn breaking and the increased drive for fibre finally hitting home in the UK, there is plenty to be excited about but much work which needs to be done. An excellent example of this is the Which report panning ISPs for failing to deliver on consumer expectations. Telcos are traditionally slow-moving beasts, though technology developments are increasingly speeding up, dominating more of our lives, change might have to be forced through.

Ofcom not only needs to ensure there is an effective landscape for the telcos to thrive, it needs to ensure these benefits are being passed across to the consumer and the economy. The next twelve months promise a very business time for Ofcom employees.

Is ‘superfast’ enough to pry an extra tenner from our wallets for 5G?

The US market is one which has suffered in the ‘race to the bottom’ but a $10 add-on for 5G connectivity from Verizon is certainly an interesting way to get ARPU heading the other direction.

With 5G networks officially ‘running’ in various markets around the world, one of the big questions which remained is how much the telcos would actually charge for the superfast bonanza. Verizon has been one of the first to twitch off the starting line with a new offer which will use 5G as somewhat of an ‘added value’ proposition to existing and new subscribers, and only for $10 a month.

“Continuing our track record of 5G ‘firsts,’ we are thrilled to bring the first 5G-upgradeable smartphone exclusively to Verizon customers,” said Verizon’s CTO, Kyle Malady.

“Not all 5G networks are the same. Verizon’s 5G Ultra-Wideband network is built by the company with the nation’s best and most reliable 4G LTE network. It will change the way we live, work, learn and play, starting in Chicago and Minneapolis and rapidly expanding to more than 30 US markets this year.”

Starting in Chicago and Minneapolis the 5G euphoria will quickly spread throughout the US. What is worth noting is coverage will of course be limited in the first instance, but that will unlikely be a roadblock for the early adopters who want to have 5G for the sake of having 5G.

For those who are concerned the network will be available without the compatible devices, Verizon has also partnered with Motorola to launch what the telco is promising will be the world’s first 5G smartphone. The device itself will not be 5G compatible, but users will have the option to purchase a 5G moto mod, which can be attached to the devices to plug into the superfast networks.

What we’re more interested in here is the sales strategy.

This has been one of the big questions which the industry has faced over the last couple of months; how will 5G connectivity be sold to the consumer? As it stands, there are few demands on the consumers digital lifestyle which are not answered by 4G. This will not be the case in a few years when new products and services emerge, but right now, 5G is an answer without a question; it’s a tricky conundrum for the telcos.

This is an interesting approach from Verizon however. We suspect anyone selling a 5G contract to subscribers will face failure, aside from the early adopters, though positioning the superfast connectivity as an add-on to subscriptions could be an interesting way to gain traction. And then there is the price.

$10 extra each month is affordable, and it is a very good play on nuance. If Verizon attempted to sell subscribers 5G connectivity for $60 a month, most would probably ignore it. However, by selling a 4G contract for $50 a month and offering an upgrade for $10, more would possibly consider it. It’s fundamentally the same outcome, but clever manipulation of the customer could achieve the desired results.

Buying something for $60 a month is scary, because that is a lot of money, but adding on an extra $10 onto a necessity becomes much more palatable. It’s the very same reason Netflix or Amazon Prime are priced so low compared to some other premium content platforms; spending $10 a month doesn’t sound like it will break your bank account, but scale of subscribers makes a difference for the provider.

While we still believe consumers are too cash conscious for consumer 5G tariffs to be a roaring success in the immediate future, this is certainly an interesting approach to generating ROI. Other telcos should take note, this is the sort of initiative which will give the best opportunity for success.

Data survey suggests UK consumers should be more price savvy

Cable.co.uk has released data which suggests the UK is 136th in the world for affordability when it comes to mobile data plans.

Data is increasingly running our lives and while many might feel they have struck the right balance between quantity and affordability this survey suggests otherwise. After comparing 6,313 mobile data plans in 230 countries, the UK ranks at 136 worldwide, and in the bottom half of the table for Europe.

“When looking at the UK compared to our European and EU counterparts, it’s disappointing to see the UK among the most expensive countries for mobile data,” said Dan Howdle of Cable.co.uk.

“Despite a healthy UK marketplace, our study has uncovered that EU nations such as Finland, Poland, Denmark, Italy, Austria and France pay a fraction of what we pay in the UK for similar data usage. It will be interesting to see how our position is affected post-Brexit.”

On average, UK consumers are currently paying £4.97 per GB a month ($6.42), with the lowest being £0.7 and the most expensive as high as £32 per GB a month. What is worth taking into account is the survey only measured SIM-only plans, excluding the complicated task of factoring in the price of a subsidized device. But how does this compare to other countries?

India was the cheapest worldwide, with a GB costing only $0.26 per month, though all of the telcos are struggling to remain profitable. Asian countries take up 50% of the top 20 in fact. Finland was the cheapest in Europe, $1.16 per GB a month, while across the pond, US consumers are paying $12.37 per GB a month and the Canadians came out at $12.02. The global average was $8.53.

As there haven’t been riots on the streets, it does seem most consumers are relatively content with the price they are paying. Admittedly in some cases it is extortionately expensive, something which should be addressed, but many of the markets are pricing plans in-line with the relative wealth of the nation.

That said, there is a wide chasm between the most and least expensive plans more often than not. This suggests consumers are not being savvy enough when purchasing mobile contracts in the first place, are not aware of other deals which are available or do not believe there is value in changing provider. It may be easy to blame the telcos for the high-price of data, but this can be a lazy route to take.

Cable.co.uk and other consumer groups might use this data to punish telcos, we suspect the increased price in the UK is more to do with consumers not being savvy enough. After years as a Vodafone customer, your correspondent switched to Giffgaff and a data plan which was much more generous. Admittedly a subsidized phone is not included in the deal, but in paying £1.33 per GB ($1.75), the monthly bill is substantially lower than what Vodafone was offering, or what Cable.co.uk have identified as the monthly average in the UK.

We believe the consumer is not blameless. For example, a now-available Vodafone 24-month contract with a Huawei Mate 20 Pro would cost £38 per month. Adding in the upfront cost of £179, the total would be £3.03 per GB a month. This is still below the average quoted by Cable.co.uk and would still be lower if the cost of the handset was factored into the equation.

Cable.co.uk has only taken into account tariffs which are currently available to consumers, therefore removing data points from legacy and on-going tariffs which might have thrown the averages, but the availability of cheaper contracts suggests some of the blame has to be taken by the consumer.

The price of tariffs are generally relative to the market which they are in. In the UK, we are relatively lucky due to competition keeping the price of data down (in comparison to the geographically vast markets such as the US) but squeeze too tight and the telcos don’t have enough to invest in networks in a commercially viable fashion, or they prioritise markets which are more profitable. Both would impact experience and the latter would create a digital divide.

While your correspondent cannot comment on other markets, being based in the UK, the outcome of this survey seems to be relatively clear. If you’re not happy with the price of your tariff, move, as there are cheaper options on the market.

Trump takes next step in Chinese trade war

The United States Trade Representative will place a second round of tariffs on roughly $200 billion of imports from China, effective September 24, though it looks like Apple is passing through unscathed for the moment.

The 10% tariffs will be introduced on September 24, rising to 25% on January 1. Should China take retaliatory action, President Trump has promised to move onto phase three of the strategy, placing tariffs on an additional $267 billion of imports. While these tariffs are thought to spread to consumer goods, it seems some tech companies will escape any financial burdens, at least for the moment.

“After a thorough study, the USTR concluded that China is engaged in numerous unfair policies and practices relating to United States technology and intellectual property – such as forcing United States companies to transfer technology to Chinese counterparts,” said Trump. “These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy.”

While the White House has attempted to shield the consumer from the negative impacts of the tariff strategy, it was only going to be a matter of time. Not only would the domino effect of the initial tariffs eventually spread through various ecosystems, the US only imports so much from China. Two rounds of tariffs worth $250 billion was bound to hit the consumer pocket before too long. That said, certain products feature on the 300-list of exempt products.

You can see the full list of products on the tariff list here. It is of course incredibly wide ranging, it’s 192 pages long, though the consumer’s back pocket will almost certainly be hit. Seafood features heavily to start, and fans of frogs legs will also suffer. Vegetables are there, as is vinegar. Suitcases, golf bags, baseball mitts, bible paper, carpets, hats and car seats will also be included.

Looking at the technology industry, smart watches, wireless headphones and smart speakers are believed to be on an exempt list, though this is only from the US side. US heavyweights such as Apple might be largely free of collateral damage for the moment, though China will hit back before too long.

Trump might be looking to protect industries and consumers which will largely be in his support camp, though this is not to say Beijing won’t look to inflict damage here. In response to the tariffs imposed in June, China hit back against the farmers, and while iLifers might have been protected thus far it would certainly be a big scalp to claim. Considering the reliance Apple has on China, this would certainly be an effective move.

So far the consumer may not be that concerned about the escalating trade war, as the short-term benefits are a PR win for Trump. Presidential speeches can focus on driving more jobs back onto US shores and the bank accounts are bulging thanks to the tariffs. But this round of tariffs will certainly make life more expensive day to day.

In excluding certain products from tariffs, the Trump administration has simply pointed towards products which it believes could cause political damage. With such an open goal, we imagine the Chinese government will take an incredibly long run up at the consumer technology industry. Look out Apple, Beijing might be eying you up.

Korean operators set to switch to usage-based billing – report

In a sign of the disruption set to be unleashed by the 5G era is has been reported that Korea’s main operators are all expected to switch to usage-based tariffs next year.

This is the view of Hana Financial Investment and was reported by the Yonhap news agency. The rationale stated in the report is that usage-based billing will offer higher ARPU and thus cover the cost of investing in 5G, but that seems like a pretty tenuous theory. Yes, some people will pay a premium to be able to constantly stream HD video over 5G but a lot more may end up paying very little because they’re on wifi most of the time.

“There is a high possibility that mobile carriers may change their current high definition content into UHD or virtual reality, which will inevitably lead to an increase in traffic and jack up their sales sharply,” Kim Hong-sik, an analyst at Hana Financial Investment, was quoted as saying in the report.

Usage-based billing is expected to become more commonplace, but the assumption that it will be a cash cow seems hasty. Assuming telcos every get their digital transformation act together, they should be able to get into deals with OTT players like Netflix and app developers to introduce dynamic billing models that allow premiums to be paid for certain scenarios.

Lest we forget, usage-based (or metered) billing was common back in the 3G era, but if failed because it dissuaded people from using data at all. Then they jumped to unlimited and everyone got carried away in the opposite direction, before the industry settled on the monthly allowance model that prevails today.

Unless metered billing is introduced in a much more sophisticated way this time there’s no reason to assume it will fare any better. Another billing revolution expected to accompany 5G is a return to unlimited, which would presumably appeal to heavy users, so it will be interesting to see how they manage this. The fact that all three of them seem to be planning to make the move unison is also noteworthy.

US unveils China tariff list

Last month President Trump signed a memorandum which confirmed the US would be kicking off a trade-war with the Chinese and now the 1300-strong list of products subject to tariffs has been released.

The list will target approximately $50 billion worth of Chinese imports in an effort to prevent China from ‘coercing’ US companies into snubbing domestic alternatives. The trade-war is officially on, and we are not too sure how this will be of benefit to the US economy in the long-run whatsoever.

“The proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy,” the Office of the US Trade Representative said in a statement. “Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery.”

This is not a specific attack on the telecommunications sector, rather the wider Chinese technology sector. However, considering the upcoming investments which will be made in communications infrastructure, the Chinese telco space will definitely feel the impact. You can check out the full list here. What is worth noting is this list is still a proposal, but it shouldn’t be too long before the tweaks are made and it is official.

While the list goes into very specific detail in some areas, the approach to telecoms is with a much broader stroke. Some of areas subject to the proposed tariffs include:

  • Printed circuit assemblies of the goods of subheading 8504.40 or 8504.50 for telecommunication apparatus
  • Electrical machines and apparatus nesoi, designed for connection to telegraphic or telephonic apparatus, instruments or networks
  • Oscilloscopes and oscillographs, specially designed for telecommunications
  • Instruments and apparatus specially designed for telecommunications
  • Optical fiber cables made up of individually sheathed fibres

Other areas under threat include critical components for the manufacture of robotics or computing hardware. Communications infrastructure isn’t the only area targeted by the US Government as devices and more general hardware fall under the tariffs as well.

One of the repercussions we have focused on is the impact such tariffs will have on the ability for American companies to do business in China, the Chinese government has already pointed towards potential 25% tariffs on 128 American imports, but the list confirms consumers will likely be hit as well.

“As we’ve said all along, tariffs are taxes on consumers and a drag on the nation’s economy,” said Matthew Shay, CEO of the National Retail Federation. “While we are pleased that many everyday products such as clothing and shoes are not on the list, we remain concerned that other goods such as consumer electronics and home appliances are targets. And we believe that tariffs on certain machinery will make American-made products more expensive.

“This entire process creates uncertainty and makes it difficult for retail companies that must rely on complicated global supply chains. Tariffs threaten to hurt consumers, jeopardize job creation and increase the cost of doing business here in the United States.”

President Trump might point to the fact Chinese companies are taking jobs away from American workers but there is a very good reason for this; it isn’t economically feasible to have these jobs in Western economies and, quite frankly, most people in Western economies think themselves above manufacturing jobs which are eagerly fought for in developing countries. The American economy has greatly benefited from outsourcing manufacturing processes let’s not forget.

There might be some political point scoring to be done in the short term, but it won’t be long before US tech companies are losing out to international competitors and the price of electronics goods in the US start to increase. Protectionism in a global economy does not work and those blindly supporting this move will find that out very soon.