Operator backlash against fair usage policies begins

It’s an often heard observation in the industry that mobile data has become a victim of its own success. The unlimited data offerings used to drive 3G adoption have resulted in an unsustainable business model, with the result that operators are now scrambling to revise their usage terms and introduce new billing schemes. Vodafone UK issued one such warning to its consumers this week.

From June 1, Vodafone will scrap the fair usage policy on its 500MB Flexi or Value Pack offerings, introducing out of bundle charging for pay monthly customers that go over the 500MB limit.

Under the new charging structure, monthly bundle customers will pay £5 for every 500MB after the first 500MB, while customers without a monthly bundle will pay £0.50 for every 10MB after the first 25MB.

Vodafone said it is introducing a real-time notification service to alert its customers to their usage patterns and be completely transparent about these charges. “The reason we’re introducing these charges is to make it fairer for everyone, and to protect our network from data abuse,” the company said.

Vodafone’s move is indicative of a growing trend, one the western world can expect to see more of. As Informa analyst Tony Brown noted on Monday: “The fact is that an increasing number of wireless broadband operators – across both 3G and WiMAX – are moving towards stricter download limits for subscribers and that there are increasingly few operators in the wireless broadband market that are offering unlimited packages to subscribers.”

Brown was talking about the Asia Pacific region, where this approach seems better developed. Telecoms.com recently met with Tarek Robbiati, chief executive of leading Hong Kong operator CSL, which recently made the shift to speed based pricing for mobile broadband.

We have also looked at the mobile data explosion and its after effects, as well as the different strategies operators might employ to create new revenue streams.