Thinking of switching to 4G? Data limits might leave you out of pocket
THERE is an ad currently on television with a man riding a winged horse to the tune of Kenny Loggins' 'Highway To The Dangerzone'. The ad is for Meteor's new 4G mobile phone and broadband service. The point of the ad is that you can now get very fast mobile broadband on your laptop, phone or tablet to watch Netflix, listen to Spotify or do other things that rely on fast broadband.
But if the ad truly reflected 4G in Ireland, it would show special toll booth clouds every 5 kilometres. Because if you use a 4G phone in Ireland the way a 4G phone is meant to be used, you might pay an absolute fortune in bills.
I love 4G. I've been using 4G phones, dongles and tablets (from Vodafone and Meteor) for the last three months. The speeds are excellent: I regularly clock between 15 megabits per second (Mbs) and 25Mbs. This is better than most Irish fixed line broadband connections. Because it's so good, I'm now using it for work and leisure. That means research (work), television, movies and music (leisure).
I've been doing this mainly through a mixture of a 4G dongle (for a laptop or tablet) and a 4G smartphone. In other words, I'm as close to a poster child for 4G as you can get. I'm using it for exactly what they say I should be using it for.
But there is no way I could continue using a 4G phone, based on the data limits that the mobile operators are currently offering.
A Spotify song takes up to 10MB per stream. A Netflix TV series takes up to 1GB per episode. The best deal that Vodafone is offering with a new phone is 8GB per month (for €87 (which includes calls and texts) with €10 per GB after that. So if I watch a series of 'Breaking Bad' (13 episodes) on my 5-inch phone and listen to an hour a day of music, it would cost me €153 per month, or almost €2,000 per year on Vodafone's current data tariff structure. And that's without a single Facebook login or email sent.
On Meteor, it is cheaper but still unaffordable. To watch and listen to the same modest Netflix and Spotify content specified above, it would cost €90 per month (which would include calls and texts) or €1,080 per year.
It's fair to point out that these are phone plan tariffs (and that Vodafone has not yet indicated any 4G-specific tariff changes). Both operators offer standalone 4G dongle services for using your laptop or tablet on 4G. Vodafone's costs €30 per month for 20GB, while Meteor's costs €25 per month for 20GB or €30 per month for 30GB. These are pretty good value, considering their flexibility.
Why are the operators charging these massive rates for activities they say are part of the fun of 4G? In their defence, they argue that they must make a return from their investments. These are considerable. The four main Irish networks combined have committed over €800m just for 4G licences. And that's before any technical costs: Vodafone alone will spend €500m over a four year period upgrading its network.
Meanwhile, returns from other sources are drying up. Revenue from SMS texting is collapsing at over 10pc per year in Ireland because of the prevalence of Facebook, Twitter, iMessage, Whatsapp and others. Competition is driving bills down, too: Irish mobile bills have fallen from almost €45 per month to just over €25 per month in the last five years.
So the operators need to make money somehow. Clearly, data charges are it. One operator executive recently told me that it was hoped that business accounts would tolerate higher data charge bills if other factors, such as data reliability, were assured. This market, it was argued, is less price-sensitive than consumer segments.
The position of 3 Ireland, which has yet to launch its Irish 4G offering, might be critical to the debate. That operator has had an 'all you can eat' data policy. Although technically tagged at 15GB, the operator has repeatedly emphasised to the media that it allows 30GB, 40GB or 50GB within that plan. If this policy continues without fear of cut-off, warning or 'throttling' (where they disincentivise you from using your service by cutting back your speed from their end), it could prove difficult to beat.
But that's a big 'if'. Right now, operators are desperately looking for ways to stem their revenue slide.
4G data may be the quickest way to do it over the next year.