Guinea-pig users losers with punishing GPRS charges
South China Morning Post (Hong Kong)
April 1, 2003
While our mobile-phone carriers plan for next year's roll-out of third -generation (3G) telephony, they are trying to prepare us with lightweight data services. Following the debacle over wireless application protocol, the carriers are keen not to over-hype either 3G or its forerunner, general packet radio services (GPRS).
Instead, they have been promoting data as a way to download ringtones, play games and send photos to loved-ones. Sending war updates by short-messaging services was an interesting idea, as were similar ideas with financial services, the Mark Six and horse-racing results. But most of these are simple push systems, in which the carrier does the work and the user passively waits to be fed. That is no way to build a market.
But the operators know that if their customers were to actually use data services to their fullest capacity, they might suddenly notice what over -priced luxuries these things are.
Last week, I spent three days with Sony Ericsson's P800 smartphone. The P800 runs Symbian's operating system and the Opera Web browser. Unlike the shoddy apologies running on the average phone, Opera can read almost any Internet connected page, and read it well. But therein lies a danger. Downloading Web sites consumes a lot of kilobytes.
And after three days of happy surfing, I received my phone bill.
If that HK$ 400 GPRS charge had been for a month's downloads, I might have been irritated. But I was appalled at what I was charged for three days of sporadic surfing.
By any measure, GPRS charges are extortionate. They are also confusing. Just as we saw with voice and Internet services, the operators appear to have conspired to make their charges as hard to compare as possible.
Just looking at basic data rates, Smartone charges HK$ 0.20 per kilobyte, while Sunday charges HK$ 0.08. That is not hard to compare. But then neither CSL nor Orange have a minimum per kilobyte charge. CSL wants HK$ 98 per megabyte, while Orange expects HK$ 9 for 30KB. New World Mobility asks HK$ 128 for 5MB.
The only way to work out carrier value is to sit down with a calculator. Assuming that a kilobyte was roughly the first half of a knock-knock joke, I calculated how much each carrier was charging per megabyte.
Discounting promotional offers, and basing the calculation on each operator's basic rate, the price per megabyte is: Orange HK$ 307.20, Smartone HK$ 204.80, CSL HK$ 98, Peoples HK$ 92.16, Sunday HK$ 81.92 and New World Mobility, HK$ 25.60.
The fact that I am a Smartone customer would explain the size of my bill. No doubt the carriers will say that I am being unfair. After all, most of them charge progressively less the more you consume.
Calculating from their top rates does move the advantage around: Orange drops to HK$ 16.60, Smartone to HK$ 25.49, CSL HK$ 27.10, New World is HK$ 22.80, Peoples, which charges a flat rate no matter how much you use, stays at HK$ 92.16, and the charging at Sunday is so complex you do not even want to think about calculating it. To reach those low rates at Smartone and Orange, you have to spend a monthly HK$ 498 (although Orange give you an extra 11MB for the price).
At the bulk-buy rate, mobile data prices are clearly too high, but at the entry-level, they are almost criminal.
Meanwhile, an increasing number of PDA and laptop owners are getting online using wireless technology for nothing, using Wi-Fi. Even Netvigator's 200 commercial hotspots cost HK$ 28 for 200 minutes, or HK$ 80 for 24 hours in the airport, no matter how much you download.
Netvigator's pay-as-you-go service has a basic HK$ 3 rate for 10 minutes at 1.5Mbps. Assuming conditions are ideal, that will get you a megabyte in 5.3 seconds. Even if service is heavily degraded, it is still a bargain.
Opera Software marketing director Pal Hvistendahl says mobile-phone operators believe they are on to a good thing.
"I think the GPRS operators right now just do not know where to set the price level. They are just experimenting," he says.
Trouble is, they are also experimenting with our wallets. As long as data charges stay this high, customers will be reluctant to subscribe to them. At most, they will choose pay-as-you-go and avoid logging on too often, which, at HK$ 100 or more per megabyte, is good news for the carrier.
But the compulsive connectors, those of us who want more for our money than pappy pop tunes or cartoon wallpapers, will naturally gravitate to Wi-Fi.
Wi-Fi's most common standard, 802.11b, allows up to 11Mbps. But its likely successor, 802.11g, will enable up to 54Mbps. Compare that to 3G, which will offer up to 2Mbps.
In an ideal world, the two standards could co-exist. Our phones could automatically switch to the stronger signal. Wi-Fi would dominate in built-up areas, while 2.5G or 3G would better serve locations such as the harbour, the KCR and tall buildings.
But in Hong Kong, carriers prefer the fast buck, especially with infrastructure costs to cover. When 3G does arrive, you can bet local mobile -phone carriers will still be trying to gauge subscribers with prices designed to bewilder and services nobody wants.
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