Mobile data pricing: Australia vs. the world

Americans paying more for data but receiving bigger buckets. UK has best rates.

Australians can find cheaper data rates than Americans for top smartphones but smaller data buckets Down Under can result in extra fees.

Mobile data pricing in Australia “compares pretty well” to other major mobile markets in the world, WhistleOut director Cameron Craig told Computerworld Australia.

WhistleOut, a comparison website, recently found that the US charges more than Australia for smartphone data plans on the Apple iPhone 5 and the Samsung Galaxy S3. However, UK prices were similar or lower depending on what was included.

Comparing Galaxy S3 plans offering unlimited calls and a minimum of 500 minutes, WhistleOut reported that the best deal over a 24-month contract was a T-Mobile UK plan for A$1527. The next best price was a Vodafone Hutchison Australia plan for A$1738. The best US price was a Sprint Nextel plan costing A$2584. New Zealand had the most expensive plan, at A$2802 on 2degrees Mobile.

Australia offers “relatively good subsidies on phones,” and mid-range plans tend to have better value than comparable plans in the US, Craig said.

At the same time, American telcos force buyers of certain smartphones to subscribe to higher-priced plans, he said. For example, American carrier AT&T offers a $39.99 plan for consumers, but if you want a new iPhone 5, a mandatory data pack of $20 per month must be purchased, he said.

However, the UK tends to have better prices than Australia for mobile data, Craig said. The UK has “furious” competition and it’s cheaper for carriers to provide good coverage because there is much less area to cover than in Australia or the US, Craig said. Those savings are reflected in cheaper plans for consumers, he said.

A spokeswoman for the Australian Communications Consumer Action Network (ACCAN) said Australia has “a number of providers offering data services in the market with a reasonable range of price points.”

However, unplanned overage charges — “bill shock” — can result in Australian consumers paying more than they expected, she said. “Excess data charges range from 10 [cents] to 50 [cents] per MB, but most people couldn’t tell you that and there’s no transparency around what you pay for data within a plan’s included value as it is effectively bundled with calls and texts.”

Concerns about bill shock have lingered even after the new Telecommunications Consumer Protection (TCP) code was released by the Australian Communications and Media Authority to address the issue.

The US and UK do have the advantage of offering “unlimited” data plans, a concept that does not exist in Australia. In WhistleOut’s Galaxy S3 comparison, the UK and US plans provided unlimited data, whereas the Australian plan provided 4GB and the NZ plan gave only 500MB.

Smaller buckets of data offered in Australia could become more of a pain as users switch to 4G, because the faster data speeds encourage viewing of more data-intensive content, Craig said.

However, Craig cautioned that US telcos frequently restrict their “unlimited” plans, he said. “They say unlimited,” but after getting 4G speeds for the first 2.5GB, speeds are reduced to 3G levels, he said. Also, most of the unlimited plans in the US do not allow tethering to other devices, he said.

Public Knowledge, a US public interest group, advocates strongly for unlimited data over data buckets, said its vice-president, Michael Weinberg.

“At its most basic level, an unlimited connection encourages people to try new things with their broadband connections,” he said. “When they get that forwarded link from a friend, or see coverage of a new service, their first question does not have to be, ‘What am I going to stop doing this month to give this a try?’”

Data caps lead to extra charges and underutilisation, Weinberg said. “Because going over the cap (or out of the bucket) means paying more money, most people end up taking steps to stay well below their limit.”

Follow Adam Bender on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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