Dan Warne21 July 2008, 2:45 PM
What's the catch with Optus' new unlimited mobile plans? We interviewed Optus consumer marketing chief Michael Smith to find out.
APC: These plans look great, but people are naturally sceptical about what's included, since a lot of people feel you need to have a PhD to really understand mobile plans!
MS: You're not the first person to say that to me… it's part of the complicated nature of the industry we work in. However, that’s something we're really trying to tackle with these plans. What's included is unlimited standard SMS, unlimited national calls, local calls, unlimited calls to any mobiles, and that makes it a lot easier for people to understand.
APC: So can you take us through what is excluded?
MS: The things that get excluded are international calls, global roaming, calls to special numbers such as 124YES or 19 numbers, directory assistance and data usage outside what's included.
APC: What about 13 and 1800 numbers?
MS: 13 and 1800 numbers are excluded — they're not considered standard landline numbers. They are charged at the normal national calling rate of the plan you are on.
APC: That might trip a lot of people up… 13 and 1800 numbers are pretty common when you're doing your phone banking or calling a company about a bill query, or whatever. And they're included in your current caps…
MS: Sure, but we are being totally upfront about these charges. It's reasonably well documented in all the marketing we've done. Also, in terms of the current usage we see on people's accounts, those number types only account for about 4% of call time.
APC: A lot of people have noticed that your top-end $179 iPhone plan only has 1GB of data and has a capped number of callling dollars. The $129 timeless plan with 2GB of usage and unlimited calls seems far better value…
MS: Well, yes, all of these plans are obviously a lot better value than any previous plans we've ever offered — our other plans come from a past world where everything was measured and charged for. Most people on the iPhone are currently connecting on the $59 plan which includes 500MB of data at the moment, but this introduces a new level again.
APC: So, what will it cost to get an iPhone on the $129 timeless plan with 2GB usage?
MS: The iPhone will be free, with no handset payments. As you know, in the Australian market, telcos use the plan fees to subsidise the cost of the handset. The sort of subsidy rates you would have traditionally seen on a $79 capped plan will carry over to the timeless plans.
APC: Are these plans a recognition of the growing use of Skype and other super-cheap calling products?
MS: Not really… it's something we've been building for four or five months now. The genesis of the idea came from customers saying they wanted to use their devices how they wanted without limitations. If you look at the late teen market, they do a lot of messaging — they don't want restrictions. Also, a lot of people are asking why "why am I paying $30 a month for line rental on home phone… just give me something that lets me have price certainty and use as much as I want. "
So, it's not so much about combatting VoIP; obviously a lot of our broadband customers are using VoIP (and this has some impact on traditional international call usage), but as a company, we're about challenging and being the upstart.
I think in the past few years some people have looked at Optus and started wondering if we are really the challenger we once were, or more of a traditional mobile network. But if you look at what we're doing now, with our commitment to building out 98% high speed wireless broadband and voice coverage despite the government pulling the funding, and how hard we've gone with iPhone plans compared to some of our competitors — letting customers use it how they want to — it shows that we have really come back as the challenger.
These plans with unlimited value are our showstopper to show how committed we are to being the challenger in the market.
APC: Some people are asking why it is that Optus is going in one direction with mobiles but in the other direction with broadband. For example, Optus was the company that broke Telstra's terrible caps in the early days by introducing unlimited broadband. Then it introduced caps itself. Then Optus had Fusion which included unlimited landline and calls to mobiles, and broadband with no excess usage fees, then Optus introduced excess usage fees.
MS: To be honest, we had just as many complaints from users who hated being throttled to dialup speed, so we were in a betwixt and between position on that one. Our previous plans said you could go to a certain amount and then it would be throttled down.
Our plan on the broadband moving forward is for throttling to be still available to customers but the bulk of customers wanted to continue on using and pay extra. They get an email warning them when they are near their limit and they can set up SMS alerts as well, so it's pretty hard to run up big bills from excess usage. However, we don't want to find ourselves in the position on broadband where customers have an unlimited amount of data at maximum high speeds, because the amount of investment in the network required is unsustainable.
The ones that don't like it the most are extreme users and for me to bring something to bear — and I'm still working on some plans for those types of users — but I don't think I should be basing my whole construct of plans around them.
APC: But again, why introduce plans with unlimited voice usage, but on the other have tough limits on people's broadband usage?
MS: Well, I'd sort of deny that our limits are tough on the broadband, but more importantly, a voice phonecall has a much smaller impact on network usage than someone using broadband at full speed.
APC: Fair point. Another question from readers: why have unlimited calls on these plans and not unlimited data?
MS: The simple answer is that it's very easy to connect mobile phones to your computer these days and use them as a modem. The iPhone's not one of them, but take any Windows Mobile Device and within about 10 seconds, even an idiot like me can set it up as a modem for use at home. If we were in a scenario where we could be sure the data usage would be contained to the phone, we'd be less concerned by offering unlimited data on the phones.
Also, I was using my wireless broadband laptop dongle out in Berry (regional NSW) the other day and the data was absolutely flying — at home, it's substantially different to that. The dynamics of a mobile network are that depending on the place, and how many people using it, speeds vary. We don't want people thinking the network resources are unlimited, using internet constantly and degrading the experience for everyone else.
APC: I notice you can add Blackberry service onto these plans. However, given Blackberry plans have traditionally been differentiated based on the amount of usage in megabytes, yet these plans you're offering have up to 2GB of usage, why is Optus still offering a $25.95 Blackberry plan with 2MB of data usage, and a $49.95 unlimited Blackberry plan? It doesn't make much sense.
MS: Well, obviously you can use email on just about any phone with one of these plans and 2GB will be enough to cover just about anyone's email usage for a month. However, with Blackberry we have a different financial arrangement with [Blackberry service provider] RIM where they charge us a recurring monthly fee to provide the relaying of the email through their Canada-based data centres. We're currently in discussions with the guys at RIM and we'll have some new Blackberry add-ons out within the next few weeks which will provide Blackberry service, but won't cost $25 on top of the plan fee.
APC: A reader sent me this question: "Dan — I'm either dumb or someone is very brain dead in Optus on this $119 unlimited plan with no data. Why would you do it if you can do the $99 plan + $14.95 internet pack, which equates to a $113.95 plan with more benefits (200Mb of data)"
MS: The inclusion of the $119 plan is in our interests as a company to encourage people to take multiple products in one suite. We'd like people to take data and voice together. We don't actually expect many people to take up the $119 — we expect people to take the $113 plan.
APC: Hmmm… OK! With the $99 plan and $14.95 internet plan, which can only be taken together, why not just market a $113 plan?
MS: We wanted to try to make clear to people that you are getting a certain amount of voice and a certain amount of data — help people see that 200MB of data is included, and that it's good value. It's probably about the average amount of usage needed to cover internet usage on any 3G phone apart from the iPhone, so we are really opening up internet on mobiles to people and removing the high costs.
APC: How much data do you think is needed for the iPhone?
MS: Well, in the last 10 days, I've used about 162MB down and 16MB up… so I think for most people 500MB is about the minimum they'd want if they plan on using the features of the phone. I've done a lot of maps and web browsing. It's a risky discussion of course, but if you think of a normal distribution curve of people, 80% of people will be covered by the 500MB provided in our $59 iPhone plan, or they can go for the 2GB in our $129 timeless plan for maximum freedom.