Death knell for 'unlimited' data plans
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One of Hong Kong's largest mobile phone operators will stop offering unlimited data plans to new subscribers when a guideline set by the government watchdog comes into effect on February 13.
SmarTone's decision could be the cue for other telecommunication companies to follow suit and could mark the end of unlimited data access for the city's smartphone users.
The move came after the Office of the Telecommunications Authority told companies to spell out all hidden limitations in 'unlimited' data contracts from a week on Monday.
The watchdog said the operators' so-called fair use policy had led to many complaints from customers.
Many telecommunications companies offered unlimited mobile data plans in an effort to grab more market share. But with the number of smartphone users exploding over the past few years, the networks are struggling to meet the demand. Some companies have tried to address this by slowing down the data transmission speed for heavy users.
SmarTone said they would rather stop offering such a plan because it would be 'impossible' to comply with the new rule.
'It is impossible for us to explain details of our fair-use policy as Ofta requires,' SmarTone chief executive Douglas Li said.
For contracts signed on February 13 or later, the maximum amount of data use for a HK$298 monthly plan will be capped at two gigabytes. Clients whose contracts have not ended will not be affected by the change.
With 2GB, people can browse 1,000 webpages, browse 10,000 e-mails or watch a five-hour video.
More than eight out of 10 of customers on an unlimited monthly service would be unaffected if they had to sign one of the new 2GB contracts, Li said. 'Eighty-five per cent of the company's smartphone clients use less than 2GB of data a month.'
Costs for the operator have risen considerably as the average data use of customers has surged from a monthly 89 megabytes in January 2010 to 1,313MB. One client set a record of 700GB.
'To charge a person according to his amount of data use would be fairer to most users,' Li said.
The proportion of SmarTone's 1.54 million subscribers who use more than 2GB of data per month, according to chief Douglas Li