Cheap 4G plans could lead to big bill shock: ACCAN

The first 200MB may be cheap, but the next 200MB could cost users $100

Exetel's $20 4G plan charges 50 cents per MB after the first 200MB.

Exetel's $20 4G plan charges 50 cents per MB after the first 200MB.

Beware of cheap 4G plans providing minimal data, the Australian Communications Consumer Action Network (ACCAN) has warned.

While 4G is designed to consume video and other rich media, several sub-$20 plans available in the Australian market provide 200MB or less data per month.

Vaya announced a 4G plan this week for $9 that provides only 100MB, equivalent to five standard definition videos per month. In February, Exetel announced a $20 4G plan that includes 200MB.

Both telcos ride on the Optus network as mobile virtual network operators (MVNOs) and have based pricing on an Optus framework. Optus today announced a month-to-month 4G SIM-only plan with 200MB data for $20 per month.

“These low-data plans do not at all reflect how most people use a 4G-capable handset,” an ACCAN spokesman told Computerworld Australia. “These plans may look attractive due to their low monthly cost but we think there will be a lot of unhappy customers suffering from bill shock.”

“ACCAN advises customers considering signing up to what look like cheap plans to proceed with extreme caution because with access to 4G speeds your first bill is likely to be a huge one.”

Exetel charges 50 cents per excess MB, so going over the 200MB monthly limit by 200MB would result in a bill of about $120 ($20 + $100 excess).

Optus charges 25 cents per excess MB on its $20 month-to-month BYO plan, which could result in a bill of $75 ($20 + $50 excess) in the same scenario.

At 4 cents per excess MB, the Vaya plan is the least punishing, but still could result in a higher-than-expected bill if customers are not careful about data usage.

“While $9 a month looks like a great deal, 100MB of data could be used up in a single afternoon using 4G,” the ACCAN spokesman said. “It is cynical to say the least for companies like Vaya and Exetel to offer 100MB or 200MB plans over 4G for such a small amount of included data.”

WhistleOut director Cameron Craig agreed that “a $9 plan can quickly become more than $9 per month.”

Watching one 5-minute YouTube video at 480p (standard definition) will use 20MB, and the same video in 1080p HD will consume 62MB, according to WhistleOut.

A Vaya spokeswoman described its $9/100MB plan as “an entry point into the Australian mobile market for consumers after fast Internet usage at minimal costs.”

“Customers that aren’t using smartphones, aren't in 4G or strong 3G coverage areas or aren’t using much data will find the $9 Power Plan a great option with low financial commitment,” she said.

“Savvier customers that use more data than calls can also opt for the $9 Power Plan and add on the 1GB Power Plus Data Pack, giving them 1.1GB data on their plan for only $16.”

Vaya also provides automated usage alerts and “customer nominated automatic barring” to help customers avoid bill shock, she said.

An Optus spokesman said the telco “offers a range of 4G plans to suit the different usage patterns of our customers and we look to ensure they are using an appropriate plan to suit their needs.”

Optus customers can monitor data usage through an app and the telco’s website, and the telco alerts customers by SMS when they reach 50, 85 and 100 per cent of data usage, he added.

Customers can add 500MB at any time for $5, the spokesperson said. “If a customer unknowingly breaks through their allowance, they can also backdate a data top-up pack to avoid excess data charges.”

An Exetel spokesman said the telco is “fully compliant” with all the requirements of the Telecommunications Consumer Protection (TCP) Code, which was recently updated with the aim of reducing bill shock.

“We provide full disclosure (via our web site and CIS) of the plan inclusions, exclusions and costs for excess usage,” the Exetel spokesman said.

Exetel customers can view a mobile meter that shows data usage on a 20-minute delay, and Exetel automatically sends emails and SMS alerts when customers hit 50 per cent, 80 per cent and 100 per cent of their usage allowance, he said. In addition, customers can set up a maximum monthly spend limit, he said.

“If customers or third parties such as ACCAN have suggestions as to how Exetel can improve our processes or systems, we are always happy to receive their suggestions.”

WhistleOut’s Craig said he “would not heap the blame” on Exetel, Vaya or other MVNOs because they base their plans on Optus pricing constructs.

The Exetel spokesman in part defended the company’s $20 plan for that reason, saying all its plans are based on “our wholesale provider’s commercial constructs.”

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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