Even if they did, it’s going to be very difficult for most users to estimate their data usage given the iPhone behaves differently to other devices and most people wouldn’t have a clue how much they will use until they start getting their bills.

It’s interesting how the telcos are pricing mobile broadband. The question is whether their policies will kill off demand and innovation in the Australian market.

I suspect take up of mobile services won’t be huge until one of the big three breaks from the pack and starts offering data allowance similar to landline plans.

@Alex: You’re right, in general there’s not a lot of difference between phone companies because they all treat phone service as a commodity item, i.e. phone calls all the same and price is the only differentiator. None has chosen, say, quality customer service as a differentiator. Since technically they’re all heavily dependent on Telstra for landlines and Internet data anyway there’s little else for them to compete on.

(Telstra continues to operate in its own delusion-bubble, insisting they can be more expensive because they offer a “premium” service when technically there’s no difference and their customer service is consistently rated the worst — but that’s another story.)

Yes, you should have used “demand” as the explanation. Demand to own the iPhone 3G within hours of its release was sufficient to override people’s perceptions that the pricing was wrong. A few weeks later, the rush is over and now those eager-beavers have the hangover of a 24-month contract locking them into data rates much higher than those now being offered. “Suckers,” I say.

Telecommunications is indeed a ripe field, ready for you to exploit. People are social animals, and will spend money on their communication. Plus you can buy wholesale capacity from the Big 4 and re-sell in different packages.

Now, FAUC…

I think FAUC’s greatest problem is that to create a telco requires a sustained effort, with a lot of paperwork and other boring stuff. The people who’d love to be FAUC member-customers are also, I suspect, likely to have very short attention spans and won’t be able to sustain focus.

This sheet gives actual figures for going over the cap etc so comparison is more accurate. I used it and found out, surprisingly, that Virgin Beancounter (pre paid) was cheaper for me than any other plan including capped plans. As you have found out Capped Plans are not capped at all.

The sheet was developed by a Whirlpool user:

http://www.mobchoice.com.au/

There is also useful discussion over at Whirlpool itself.

As for a better argument, I thought of it this morning and kicked myself for not writing it yesterday:

You wrote “Can anyone give a rational explanation for why the data should be more expensive if the device happens to be an iPhone?“, and my simple answer should have been “demand.”

Also, I’d sooner respect a company driven by profit than a company driven by “the common wealth”, as the former is the thing that achieves what the latter aims to achieve, and the latter invariably ends up doing nothing more than confiscating others’ means for their ends (through the Government, of course.)

I don’t foresee a not-for-profit FAUC surviving without Government funding, it would not have the drive (actually, it might for the first six months), and it wouldn’t attract the people needed to get a thing like that going. On the other hand, for the same reasons, I see it being highly successful if it was profit driven.

In fact, I wish I liked telecommunications more, or even understood the essentials, because it seems as if there’s an unmined goldfield of consumers out there, waiting only for good service, competitive pricing and a decent overall product to dosh over streams of their hard earned.

That is the use of the word fair.

Nothing that I see in the Vodafone pricing structure (that differentiates so much between iPhone data and dongle-data) indicates making a FAIR profit from iPhone users.

I do, however, agree that Vodofone, Telstra and Optus are all indulging in ‘Market Segmentation‘*

My concern is that the difference that Voda et. al. are using to segment the market appears to be gullibility and/or susceptibility to advertising pressure.

The Telcos went through similar pricing/invoicing problems in the mid/late 90′s, and if I recall correctly, were required to change the way that they dealt with it in order to mitigate the “Unexpected Massive Bill” phenomenon. (Pre-paid plans was part of this strategy – Sorry, I cannot find my references to the ACCC guidances on this issue at the moment.)

This is a particular problem is the supplier does not provide an easy and accessible method of identifying your current spend/bill during your billing period or contact you if something unusual (i.e. massive overspend) occurs on your bill. (Credit card providers, for instance, attempt to contact you if you have an unexpectedly large transaction, or your spending location changes – these are NOT difficult systems to implement.)

* In this case it involves providing a similar service to different markets at a different price-point.

Here in Australia, there are many service providers that want to start making their own way but they can’t afford it. Telecommunications can be nightmarish, especially when connections are flawed, and have to be corrected for mobile networks. I’ve had to deal with many enquiries from service providers who’ve had to dispute accounts/bills (in the hundreds of thousands of dollars) due to incorrect provisioning, so in one way, I’m not surprised by the current situation with the iPhone. I’ve worked in the industry for close to four years, and it’s a terrible industry in terms of gaining any competent knowledge because each manager has a narrow mentality. Each department likes to think it is specialized (typical bureaucratic corporation and processes with more paperwork than anything else), and although customers are supposed to matter, they’re always given the runaround.

@Anastasia: I agree that the pricing of anything Internet in Australia mostly comes back to Telstra, and that in turn reflects some fairly fucked-up deals done years ago. For those who don’t know, look up “Reach” or “Pacific Century Cyberworks” for some history.

Still, the same Vodafone can buy wholesale bandwidth from the same Telstra to profitably sell 5GB/month of HSDPA data for $39 retail. I reckon they could have offered that as an add-on data plan for iPhone and made a killing.

@Alex: Not your best work. You’ve missed the nuances of what I’m saying and have responded with a slogan.*

I’m happy for Vodafone to make a profit. That’s what attracts the investors to pay for the network in the first place. In summary, apart from the iPhone pricing issue, my points are:

1. It’s a better strategy to make a customer feel happy rather than stupid or angry — and right now I feel stupid and angry.
2. Vodafone missed the first, obvious opportunity to make me feel happy (or at least prevent the stupid-angry thing).
3. The barrier for me to move to another carrier is very low: fill in a form and wait for a new SIM to arrive.
4. Vodafone’s choice is between insisting that I pay $400 extra now and getting nothing more after that, or adding maybe $40/month to my spend for the next two years for a total of nearly $1000. Their business decision should be obvious. We’ll soon see.

*Your criticism of FAUC is a joke. It demonises one of the hardest and most noble things a man can do: join with his fellow man to create something of lasting value for the common wealth.

You have nowhere to go really, so the “only good in the short term” argument doesn’t really stick. Oh well, if you think they’re doing it wrong, go into business and compete with them*. If your judgment is correct, you stand to make a lot of money.

*FAUC is a joke. It demonises one of the hardest and most noble things a man can do: make a fair profit.

I’m also a Vodafone slave (customer), so this will decide my future dealings with the company.

If you’re a lighter data user I’m on Virgin Mobile using the 50 Mb data pack for $5/month, alternatives are $10/300mb or $15 for 1GB

PS Virgin mobile gives you a reasonably accurate estimate of how much data you’ve used so far each month in the accounts section of their website