The major telcos are gearing up for a price war over mobile data and, after paying too much for data for too long, consumers will be the winners.
Optus is leading the charge, slashing prices on their data plans to compete with larger rival Telstra. Independent telco analyst Paul Budde told The New Daily that this is very good news for mobile phone users.
“That gives us an opportunity to start catching up with the price competition that, in other parts of the world, has continued over those two years while price competition in Australia has stalled a bit,” Mr Budde said.
The price of going over your data limit – one of the sneakiest charges imposed by the big telcos – has already fallen in the past 12 months, according to mobile service comparison website WhistleOut.
Telstra dropped its per MB rate from 10 cents to 3 cents in March. Virgin went from 20.5 cents per MB to 5.2 cents. And Optus introduced a system where it credits your account with 1GB of extra data for $10 each time you reach your limit.
Prices are set to plummet even as Australians are gobbling up gigabytes at an ever-increasing rate.
Eighty-four per cent of mobile users had data included in their payment plans last year, up from 75 per cent in 2012, according to research conducted by the peak digital industry body AIMIA.
The Australian Mobile Phone Lifestyle Index, a survey of over 1,000 mobile users, also found that the number of mobile users with more than 1 GB of data had risen to 57 per cent, up from 17 per cent in 2009.
This is backed up by the Australian Bureau of Statistics. The volume of data downloaded between October and December last year was 27,627 Terrabytes – a 41 per cent increase on downloads between April and June 2013.
Data plans = big profits
Paul Budde said that it does not cost the networks much to send data to your phone – which means there is a lot of potential for a price drop.
“It’s very hard to say [how much profit the companies make] per megabyte, but in general terms, really, the cost is not in you and I using the network,” Mr Budde said.
WhistleOut’s Joseph Hanlon agreed that mobile data is a big money maker for the major telcos.
“It is pretty clear from the way they give away calls and SMS with ‘unlimited plans’, that data is the only part of the equation for telcos that remains valuable.”
How to choose the best data plan
According to Mr Hanlon, one of the keys to choosing a data plan is to calculate how much you actually need.
“The big problem for consumers with data at the moment, besides the cost of it, is that it can be very difficult to estimate how much you need,” he said.
As a guide, the average WhistleOut user looks for 1.1GB of data per month in a new plan. You may not need more than that.
If in doubt, talk to your mobile phone provider. They can access information about how much data you download each month and use this as a basis to advise you on the best plan for your needs.
Some telcos also provide a text service advising customers when they have reached certain milestones in their monthly allowance, so it’s worth checking with your mobile phone provider whether this is something they offer.
Ged Mansour, head of communications at amaysim, one of the smaller telcos, advised that customers should always read the fine print, avoid long lock-in contracts, and be vigilant.
“Pricing is constantly changing. People should review utilities arrangements regularly to see what offers are out there and ensure they’ve got the best deal,” Mr Mansour said.