UK: The inevitable shrinking of 3g data caps begins

bealtine

http://news.bbc.co.uk/2/hi/technology/10285910.stm

O2 network scraps unlimited data for smartphones

UK phone network O2 has scrapped unlimited data downloads for smartphone customers.

All new and upgrading customers will have their usage capped at between 500 Megabytes (MB) and one gigabyte (GB) depending on their monthly tariff.

Analysts said the move was "inevitable" as more and more consumers switch to data-intensive smartphones that can surf the web and show video.

Other networks are likely to follow O2, they said.

"O2 had become the industry poster-child of the capacity crunch era," said Thomas Wehmeier, principal analyst at Informa Telecoms and Media.

Many customers have complained about poor service, download speeds and network coverage.

"It is a victim of its own success - O2 has had so many people sign up for data intensive phones, like the iPhone," Ben Wood of research firm CCS Insight told BBC News.

"Huge amounts of data are consumed by the minority of people."
Video pressure

O2 has said that the changes will affect just 3% of its 21m customers, who will have to pay additional charges for their data use.

"That 3% are using something like 36% of the data capacity of O2's network," said Mr Wood. "If O2 get it right, everybody will get a better service."
Continue reading the main story

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Currently, he said, O2 was spending around £1m a day to upgrade its network to cope with the "exponential demand" for data on smartphones.

However, he said, it could not carry on adding capacity if data usage was exploding for the same amount of revenue.

The new charges will be brought in on 24 June, to coincide with the launch of the iPhone 4.

"They are using the iPhone as a mechanism to introduce the tariff change," said Mr Wood.

The new handset has a higher resolution camera and is able to record high definition video, both of which will add pressure to O2's network.
'Dangerous game'

O2 currently has the largest installed base of iPhone users in the UK.

The network's cheapest tariff will cost £25 per month for two years and will allow a user to download 500MB per month. After that, it will cost £5 for every additional 500 megabytes of data consumed.

O2 said that 500MB is two and a half times the average O2 customer's current use and would allow someone to browse 5,000 standard web pages.

Mr Wehmeier agrees with the figures.

"There's a lot of talk about the hunger for data of iPhone users, but our analysis shows that the majority of users will be comfortably served by 500MB of data per month," he said.

The most expensive tariff - at £60 per month - allows users to download 1GB.

Existing customers will be allowed to keep their unlimited data plans until they renew their contract.

O2's CEO Ronan Dunne sad the move laid "the foundation for a sustainable data experience for all customers".

Mr Wood said that he thought that most network operators - who face similar challenges to O2 - would follow the change.

However, he said, others may use it as an opportunity to try to woo customers away from O2.

"That's a dangerous game to play, if that top 3% of users go to another network," he said.

O2's changes follow similar moves by the AT&T network in the US.

watty

It never was unlimited. They just obfuscated the Cap before.

500Mbyte is about an half hour a day of lowest quality Internet Radio.

Decent quality Audio streaming for 8 hrs a day needs about 16Gbyte a month. But O2 are correct, 3G/iHSPA can only actually support a low cap if you want good access speeds. It's the ONLY way to control contention.

£10 a gigabyte out of cap sounds a bargain. Is that a typo? 3 Ireland charges €990 a Gigabyte over Cap.

See also Orange UK scraps "unlimited"
http://www.slashgear.com/orange-uk-next-to-scrap-unlimited-data-vodafone-to-follow-1189445/

ct5amr2ig1nfhp

Does this change only refer to Pay Monthly tariffs or PAYG as well?

Sponge Bob

I don't think the UK wants any more 2.1ghz gear, they will roll out 2.6ghz and disincentivise the use of the 2.1ghz band this way I reckon.

watty

Caps will be the same on 5MHz LTE, and maybe x4 larger on 20MHz LTE. (Main contender for 2.6GHz). In building penetration slightly worse.

Sponge Bob

Once all the DigiDivvie and 2.6ghz spectrum is allocated there will be one a hell of a lot more capability than there is now. I suspect that 'pressure' is being applied to Ofcom here

Sponge Bob

More on same post iPhone 4g launch

http://news.bbc.co.uk/2/hi/technology/10401949.stm
Unlimited data deals on mobiles wither away

O2 iPhone customers will not be able to download as much as data as they have been used to The launch of Apple's iPhone 4 also marks the end of unlimited smartphone data plans from major UK mobile phone companies. O2, which was Apple's exclusive UK partner for the iPhone, has introduced a monthly cap of up to 1GB (gigabyte) for data on new contracts.
This mirrors a similar recent move by rival Vodafone, and Three has also today announced a 1GB monthly cap.

Some observers expressed surprise at Three's decision to impose a limit.
Ben Wood, a mobile phone analyst at CCS Insight, said: "We had expected that Three would seek to differentiate its offer from rivals by offering bigger data bundles.

"It has obviously realised that this approcah would see heavy data users signing up and clogging up its network."

Orange has always imposed a 750MB monthly "fair usage" policy since it started to offer the iPhone in late 2009.

O2 The firm said users would be able to top-up their limit, at a cost of £5 per extra 500MB."In the UK O2 revealed that 3% of users on smartphone tariffs accounted for 36% of its smartphone data traffic,"

Sponge Bob

Analsys Mason publish opinion pieces of a time. The yield per MB is shown right scale. It is plummeting on Mobile Networks.

http://www.analysysmason.com/About-Us/News/Newsletter/Improving-revenue-yield-and-reducing-network-costs-for-mobile-broadband/

The facts revealed from statistics in Norway are consistent to the experience of operators in Asia-Pacific and are clearly challenging:

• Although dongle revenues have grown by 75% (and even more in emerging markets), traffic has increased by 175%.
• Handset revenues have grown by a mere 10%, while traffic has more than doubled – clearly implying declining yields.
• Yields for mobile broadband data are ten times less than those for handset data. (Similar ratios are also found in emerging markets.)
• Dongle traffic is ten times that for handset data, implying significantly more capex at a much lower yield.
• Revenue yields for dongles have declined by 48% in the last year, and by 36% for handsets.

Plenty more, keep reading

watty

The potential, as I said before, if people used all of 10G cap, the difference wouldn't be 10:1 but 100: to 300:1 ratio of cost/revenue Data:voice

Sponge Bob

Along with the UK we have a miserable amount of spectrum in Ireland .....compared to other countries such as the Nordics and Germany who have refarmed a lot of spectrum already where we are not even at or near the starting gate unlike the UK. Therefore there is no solution in the pipeline save the ultra sub optimal 2.3ghz band that nobody else is bothering with for now anyway.

...bar an Ericsson LTE-TDD test announced in the 2.3Ghz band Comreg took off eircom, but that is a test That is LTE designed for miserable scraps of spectrum as it happens, 5mhz here and there.

watty

It's an LTE no-one will use. It exists because WiMax can do TDD (uplink and downlink in time slots in same channel). All decent performance systems use FDD (separated channels for uplink and downlink).

There is a 3G standard for TDD also. Three of the four 3G licences have a single TDD channel. No-one uses it. There have been suggestions of using it with NextWave/IPW or Qualcomm MediaFlo for Broadcast Mobile on specially produced 3G handsets, but the costs outweigh any revenue.

The Erricsson LTE-TDD test was almost certainly to score marketing points off Mobile WiMax. Fixed WiMax is an Alive and Well solution. But the 2nd biggest Mobile WiMax (Russia) is changing to LTE and the biggest (Sprint-Clearwire) has confirmed they will switch to LTE.

Sponge Bob

I beleive the Chinese are about to try LTE TDD because it can co exist with their own unique and unsuccessful 3g standard. I am aware that Comreg allowed Ericsson to trial a technology that is unlikely to deploy in Europe....ever. Not even here