One thing that has always annoyed me is the way mobile phone operators bring out new price plans at a rate of what seems like every 6 months. I’ve noticed there’s a set formula to them…
The rules go something like this:
- Call it something different i.e. if it was ‘Advance Choice 100’, call the new one ‘Flexi Monster 3000’
- Include more or fewer options than previous the package so a direct comparison cannot be made between new and old packages.
- Make it as difficult as possible for people to compare directly with other operators. i.e. our €40 plan must contain different default options than a competitor’s plan so a direct comparison can’t be made.
Go ahead, check out any phone operator and check out their constantly updating price plans… now try to compare them to their old plans and compare them with competition…. i guarantee you won’t be able to. There’ll be too many variables and this is exactly what prevents people from me about moaning about changes to price plans – i know that i’m getting less value for money but it’s too complex a system to explain to people and the phone operators are smart so even if i do explain things well, there’ll always be an easy defense for the operator – “that’s like comparing apples and oranges… yeah we’ve increased call charges by ‘x’ but our last plan had 15c voicemail, this one is free, plus we’ve reduced the cost of ‘x’ by 2c”… so there’s always an easy escape route for them. It’s nothing new, it’s been like this for as long as i can remember…
A few days ago, i’d been watching eagerly how all the phone operators were approaching the iPhone 5 launch… anyone familiar with iPhone launches in Ireland will know that it’s about as mysterious as an Apple keynote presentation. No network will release prices until another one releases them first, yet all networks are very quick to get their ‘coming soon’ iPhone 5 pages up to capture your email and phone number.
Today, less than 24 hours before the iPhone is due to launch, three are the only network who have announced any price details. O2 & Vodafone just have a coming soon lead capture page. The end result from a consumer’s perspective is that you can’t compare the different networks and are left with no information until the day of launch. You’re not sure if you can pre-order, not sure if you can upgrade, not sure if you upgrade whether you can keep your old plan etc…
On boards.ie, an o2 rep claimed on their own discussion forum that there would be no pre-ordering system. A few hours later, a pre-order system appeared on o2’s website.
You get the idea… it’s all just one big mess created by management withholding information from the public and o2’s own staff. Yeah sure it may be tactical and nobody may not want to make the first move but a better solution would simply be to state “price plans won’t be released until Friday morning”.
Right now, staff are palming everyone off with the old “we’ll publish information as soon as we get it” which only serves to frustrate people further because there’s no definitive time frame mentioned. It’s like waiting at an airport gate and being told “Your flight will be coming, don’t worry, we’re just not sure when”.
The subject of data plans was talked about on O2’s own official forums and i took the opportunity to share some facts and quotes, most of which i actually blogged about last year. Below is my post and confirmation of my subsequent banning from the O2 forums, presumably because they didn’t like what i had to say.
That was the catalyst for this blog post and made me go out of my way to do even more research on O2 Ireland and highlight what people are getting for their money today -v- what they were getting last year or a few years ago when they were buying older iPhones on older packages.
I think it’s also really important to factor in the changing habits of consumers and the improvements in technology. LTE is a great example. We don’t have it here yet but it can give faster-than-wi-fi speeds which means it’s only going to become quicker and more inviting for users to watch videos or play music on the move, through the cloud etc… any idiot can see that as we rely on technology more and as speeds increase, data usage is obviously going to increase. Average data usage per person will increase… this creates some problems for networks but the main problem is “how do we keep users paying the same amount every month when they’re probably gonna be calling and texting less and using the likes of viber, skype, facebook?”.
A financial report released earlier this year from telefonica gave some indications as to how O2 Ireland were doing… voice traffic was down 7.1% year on year but non-sms data revenue grew by 16.3%. Across Europe, it’s the same story..
“Telefónica’s successful mobile data strategy based on tiered data pricing tariffs and increasing smartphone penetration were the main drivers of top line growth. As a result, in 2011 non-SMS data revenue posted an organic growth of 33.5% year-on-year”
Now keep all that in mind when you view this chart below and let’s join some dots…
This is a chart I created which attempts to do the impossible and compare O2’s bill pay plans since they launched the original iPhone in 2008. It’s not perfect but it never can be due to the fact there’s too many variables in each price plan. So I’ve taken the 4 major components of any price plan – price, texts, minutes & data. In total, i could get my hands on 7 different price plans over the years. All of the data has been taken from screenshots of price plans or reputable news sites / blogs which published price plans at various stages between 2008-2012. I’m also only comparing the €40 plan which has generally been the cheapest over the years.
So starting at the left-most ‘bar’, that represents the first iPhone bill pay package on O2 in 2008. €45, 100 texts, 150 minutes and 1GB Data. Many would argue that’s better value than today’s package (4 years later). The right-most bar is today’s current package… €40, 250 texts, 175 minutes, 350mb data. I realise this can get complicated to read so i’ve also put it in excel format just to make sure we all understand the changes that have been made over the years…
So let’s remind ourselves that according to O2’s own stats, voice traffic was down in 2011 (7.1% in Ireland and 10% across Europe). I’m sure it’s the same in 2012. What did O2 do in 2011? They gave us more minutes. Minutes to other networks increased from 150 minutes to 250 minutes. That doesn’t add up, right? Why give people more of something when you know they’re using less and less of it?
The same thing happened with texts. Free texts to other networks went from 100 to 250. It’s unclear whether SMS usage is in decline or not… i could easily provide sources that say it is but i’ll stick to Telefonica / O2 sources. This is from a report released by Telefonica in May 2011…
“On the hot topic about SMS cannibalization, it is true that there is a growing adoption of messaging applications among our customers, but thanks to the right tariff plans we are being able to monetise new usage patterns, and therefore, we are strongly growing our total data revenues”
To me, that suggests that SMS usage is on the decline but O2 are simply trying to delay people from switching to apps like iMessage, Viber, WhatsApp etc… so that could explain the reason for increasing texts from 100 to 250. It’s not because people are using SMS more, it’s simply because O2 don’t want people getting in to the habit of using web based messaging apps, so they offer more free texts in the hope people will use them and stay in the habit of using them.
This is the big one. I know it, you know and O2 know it. Back when i got my iPhone 4 in September 2010, I signed up to a package called ‘Advance 150 + 2GB’. At that time, all networks were offering 2GB of data. A couple of months later, that data allowance had decreased from 2GB to 500mb. Not only that, the price of the same package had gone up from €40 to €45. Minutes stayed the same and texts stayed the same. What the hell were O2 thinking??
It remains a mystery… but something in September / October 2010 triggered them in to cutting data significantly. That was when the iPhone 4 was just on the shelves. In November 2010, O2 Ireland’s CFO said this
“We continue to see our customers using more data services, reflecting the growing importance of smartphones and mobile devices to access the internet on the move”.
Data, data, data. The stats say that’s where the growth is, O2 themselves say that’s where the growth is and common sense tells you that’s where the growth is – we’re using smartphones more and more and it’s becoming very difficult to walk in to a shop and buy a phone that isn’t a smartphone.
But since October 2010, O2 have decreased data allowance. Remember, they increased minutes when the facts stated voice traffic was down 7.1%. Suddenly, they decrease data allowance when the same stats say data usage is on the up. It’s the same tactics airlines use…. they’ll put the price of seats up when they know there’s a big event on and demand for seats is going to be high.
Today if you sign up to O2 as a bill pay customer, you’ll pay €55.08 for 2Gb data. You also get 600 mins / 200 texts (or can swap them around to suit). Back when i got my iPhone 4, i paid €40/month for 2GB data. I only got 150 mins / 100 texts but i’ve never actually used more than that. So if you want 2GB data, your only option is to fork out an additional €15 for calls and texts you’re probably not even going to use.
The bottom line is this…. if you’re a customer who really only wants a large data allowance from a bill pay plan on O2, you’re too late if you want ‘value’. I’d recommend looking elsewhere. Things went downhill in October 2010 and have continued to go downhill for smartphone users. Less data, higher prices which then pushes you on to a more expensive plan. Three offer unlimited data for €40.66. They’re the best value right now. Meteor offer a 5GB plan for €45.74. Vodafone allow you to build your own package which is more flexible than O2’s system. For example, 1.5GB, 50 texts and 100 mins is €45. O2 is fine if you’re not concerned about data but if you’re a smartphone user, the statistics say you’re using more data and you’re using your phone more often so even if you don’t need much data now, you will in the future and 18-24 months is a hell of a long time to lock yourself in to a contract so choose wisely.