Unlimited data plans 'usually wasted'

PUBLISHED : Friday, 10 February, 2012, 12:00am
UPDATED : Friday, 10 February, 2012, 12:00am


Smartphone users who are up in arms over an end to SmarTone's unlimited data plans may take comfort in statistics that show subscribers of such plans usually use much less data than they think.

In fact, so underutilised are the plans that customers use only about a quarter of the monthly cap that SmarTone will implement in place of unlimited data plans to new subscribers starting next Monday.

'Many people are using less than 0.5 gigabytes a month. They don't want to be shocked by their bills so they end up subscribing to an unlimited data plan to put their minds at ease,' said Eliza Lee, director-general of telecoms watchdog Ofta.

Ofta figures show average data usage in October was 463 megabytes (MB) per mobile broadband user - less than 25 per cent of SmarTone's new 2 gigabyte cap.

Cheaper data plans with lower limits might be more suitable for those with low data use, but most people who subscribed to unlimited plans never bothered to monitor their data use, Lee said.

SmarTone says it does not want to offer unlimited data plans because Ofta's guidelines, also set to kick in on Monday, are too hard to meet.

The regulator's new guidelines say service providers offering 'unlimited' plans must ensure they offer the service free from any restrictions. If they consider limits to be necessary, providers may consider offering plans with a high usage cap or flat-rate plans to replace the unlimited plans.

To avoid listing all restrictions, SmarTone chose the later option of replacing the unlimited plan with a 2GB one without adjusting the price.

Reactions of SmarTone's one million users were mixed. Some were angry about the 2GB limit, saying it would run out quickly.

Other worried users flooded to the company's outlets over the past few days and sought renewal of unlimited data contracts. They can only do so by upgrading to pricier ones.

According to SmarTone's longstanding policy, a client on a SIM-only plan can extend their contract by choosing a costlier plan that comes with a new mobile phone. Those who already subscribed to an iPhone plan can also extend their unlimited data contract for 24 months by buying a new phone.

Lee denied Ofta had anything to do with the cancellation of unlimited plans. She said companies determined their services on a commercial basis.

She said Ofta's role was to ensure information provided by the telecom companies was transparent enough for consumers to make an informed decision. As long as companies got rid of all restrictions or spelt out the hidden caps, they could continue with unlimited plans.

For those unhappy with SmarTone's new pricing, she said: 'Pricing of a particular service never falls under our regulation, but many choices are available in the telecom market... there are five telecom providers. If users are not satisfied with a particular plan, they can shift to another one.'

Patrick Chan, executive director of SmarTone, said the company did not push clients to upgrade their services. For those whose contracts expired in three months, they could extend them early without an upgrade, he said. But for other contracts, customers could wait and see instead of opting for an upgrade.

'There may be a new equilibrium in the coming one or two weeks after other providers announce their data plan caps,' Chan said.


All but this many of the major US carriers now limit smartphone data usage. Only Sprint continues the policy