Vodafone and Telstra today launch unlimited data phone plans and put an end to the dreaded excess usage charges.
From Wednesday May 2, Vodafone will launch new 12-month contract plans including unlimited calls, SMS and data for $60, $80 and $100 per month.
But while the plans technically come with unlimited data, there is a limit of the full speed 4G data included in each plan option. For $60 per month, customers get 40GB; 70GB for the $80 plan and 120GB on the $100 option.
When this 'max speed' data limit is reached customers will have their speed limited to 1.5Mbps
The bonus data offer runs until May 22.
The Vodafone unlimited plans can be paired with the purchase of any new phone on an equipment repayment instalments, and Vodafone is making the new plans available to all existing customers by offering its loyal customers the opportunity to break free of old contracts and sign up to one of the unlimited plans. These customers can move any remaining phone repayments to newer equipment repayment terms.
"We very proud of the fact that our existing customers are more important to us than new customers," said Vodafone's Consumer Business Unit Director Ben MacIntosh. "We want customers who have chosen Vodafone, who are loyal to Vodafone, to get access to the best deals regardless of what we do, and we'll never advertise that these are for new customers only."
"The industry gets a bad rap for this, and rightly so."
More problematic though has been excess usage charges. The term bill shock is widely used by Australians to refer to the experience of opening your phone bill and finding you have been charged huge amounts for using data above your plan allowance. The switch to unlimited data removes these charges entirely. This means that Vodafone, and other telcos offering unlimited plans, will give up a big chunk of revenue when customers take up these plans. But MacIntosh doesn't see this as a problem.
"If the success of our business comes down to delivering bill shock, we will not be in business for much longer. If you rely on toxic revenue, you won't be in business for long anyway.
"If customers see good value, with no tricks or traps, they will reward you with loyalty. And I can tell you that loyalty and happiness are worth more to us than bill shock will ever be worth."
The decision to set the throttled speed at 1.5Mbps was to be in line with important technology benchmarks, like the minimum speed required to stream Netflix.
"I've been personally using this since October last year, and our network and engineering team has been testing this, and we're confident that 1.5Mbps will let you do standard definition streaming," said MacIntosh.
"Now, you do know you're on 1.5Mbps, let's not try to spin it. You will notice you're on a slower speed,if you get a very large email attachment you will wait a bit longer for it to download."
Telstra too
Vodafone isn't alone in bringing an unlimited plan to market this week, with Telstra announcing it will also offer an unlimited option. Telstra's plan costs $69 per month on a 12-month contract, with 40GB of full speed data and the same 1.5Mbps throttled speed after that.
But there are a few key differences in these offers. Importantly, the Telstra plan is a BYO phone plan, and you can't pair it with a new phone if you need one. Vodafone's separation of phones and plans gives it more flexibility to offer this.
There are also a few differences in the extras available. Vodafone's plans generous include international calling minutes, starting from 2000 minutes in the $60 plan.
Telstra customers have entertainment options though, with free Apple Music and access to streaming NRL, AFL and Netball broadcasts.
Update (01/05/2018 5:14pm): Amended Vodafone's plan allowances to account for new "bonus data" inclusions
Joseph Hanlon
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