Internet Pricing War Hots Up

The Age

Thursday August 7, 2008

Adam Turner

Local carriers are under fire, writes Adam Turner.

THE iPhone has triggered open warfare between Australia's mobile carriers over internet pricing.

While Apple's new iPhone 3G is primarily a mobile phone, it is designed with mobile email and web browsing in mind and can chew through data faster than many home broadband connections.

As such, it comes with an unlimited data allowance in the US, but Australian mobile carriers have come under fire for their meagre monthly data allowances - leaving customers at risk of a nasty bill shock.

Less than a month after the iPhone 3G was released in Australia, Virgin has dropped a data bombshell by providing up to 5Gb per month of data to its iPhone 3G customers.

Virgin is offering the iPhone 3G for $70 per month with 1GB of data, with an extra $30 per month buying another 4GB - giving it the country's best value iPhone 3G data plans.

Virgin's iPhone 3G data plans bring the carrier's handset-based data pricing in line with its mobile broadband data pricing, whereas other Australian mobile carriers charge a significant premium for data used on a mobile phone, as opposed to data used on a computer via a wireless data card.

"It's odd that wireless broadband pricing seems to be different to mobile data pricing and so we're shooting to rectify that," said Virgin Mobile Australia chief executive Peter Bithos.

"I think as customers become more savvy, they will start to realise that data over a network is just data over a network, regardless of the device used."

Virgin Mobile Australia is the fourth Australian carrier to sell Apple's new wonder phone, joining Telstra, Optus and Vodafone.

A subsidiary of Optus, Virgin uses the Optus mobile network. While Optus and Vodafone's high speed coverage will soon come close to that of Telstra's, this is of little comfort to iPhone 3G users. Telstra operates its national Next G network in the 850MHz frequency band, whilst Optus and Vodafone use 2100MHz in the cities and 900MHz in regional areas. Unfortunately, the new iPhone 3G only supports 850, 1900 and 2100MHz. As such, outside the cities, Optus and Vodafone users will fall back to painfully slow, dial-up-like GPRS data speeds.

Telstra has responded to Virgin's announcement by boosting the allowance for the two entry level data plans on its Next G mobile network, as well as reducing excess data charges.

Telstra Next G customers can now purchase 150MB of data for $10 a month or 300MB for $29, with plans going as high as 3GB for $119 per month. The improved plans still leave Next G as the country's most expensive mobile data provider.

At launch, Optus claimed Australia's best value iPhone 3G plans, a title now held by Virgin. As the mobile internet war hots up, Optus and Vodafone are expect to return fire with improved data allowances.

The latest events leave Hutchison's metro-only 3 network as the only major Australian carrier yet to offer the iPhone 3G. After running an online petition to lobby Apple for rights to the device, 3 is expected to release the iPhone 3G in August.

Meanwhile, 3 has launched an "iPhone 3G SIM and Data Starter Kit" to lure in customers who already have an unlocked iPhone 3G purchased from another carrier. The plans offer 1GB or 2GB of monthly data.

© 2008 The Age

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