Vodafone UK joins dongle price war, but users want cheaper music
Published: 22 December, 2008
The UK has set the pace for the recent boom in mobile broadband contracts attached to USB dongles, but operators have had to lower their prices and make it more transparent, in order to avoid user disappointment and keep customers flowing in. Vodafone is the latest to up the ante, with its first pay as you go dongle deal, but the UK cellcos need to adopt simple, consistent pricing across all their offerings, if they are to keep driving business in their key applications during the downturn. Top of their list should be mobile music, an area that is still booming, but where UK consumers suffer the highest download rates in Europe.
Simple, predictable pricing has been top of mobile users' wishlists since networks launched, and they are only just starting to see flat rate data rates that avoid 'bill shock'. However, these support a profit model for carriers with difficulty, and the operators are always looking for a way to add premium charges to their customers' bills. Dongles have been a lifesaver as they involve a separate contract, sometimes with a user whose voice deal is on another network, and the equipment itself costs pennies.
However, O2 kicked off a price war in the fall when it started to see significant backlash against higher than expected bills, and the other cellcos are racing to keep up. Vodafone's new deal, UK specific so far, takes it into the pay as you go data field, pioneered by 3 Group. The 'TopUp and Go' offer makes top-ups a little more expensive, at £15 ($22) for 1Gb of data, whereas the breakthrough 3 deal was for £10 ($15) for 1Gb and £15 for 3Gb (matched by Orange). But the neat thing about the Vodafone deal is that at the end of 30 days, the purchase doesn't expire, and so will appeal to occasional users.
The downsides to the new Vodafone service are that there is no roaming to other countries, not even other Vodafone operations, and you can only buy a 3.6Mbps dongle with the deal, whereas monthly postpaid offers can now go up to 7.2Mbps. The prepaid dongle costs just £39 to buy, and this includes the first top-up of £15. The modem also doubles as a 4GB memory stick for moving data around.
Now UK users need to see similar efforts in mobile music from their carriers. So far, they are getting a bad deal when it comes to mobile music, paying more to download a track than in any other European country, according to a survey carried out for mBlox. This found huge inconsistencies in charging for mobile music services, and some users could end up paying as much as £9.50 or €10 for a single track, well as finding it virtually impossible to understand the charges that apply.
Some European cellcos charge as little as 75p to download a track, but UK consumers rarely have such good fortune. The mBlox survey claims that the UK is the most expensive country to download music, with France in second place. Germany is the best place to be for music lovers, offering the cheapest average rates by a long way. The reason why operators can set their own pricing regardless of deals with content owners, is the small print on 'fair usage' within contract terms and conditions.
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