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Why the Vodafone flat-rate data tariff is lacking

2008-03-27This post is over 2 years old and may now be out of date

(4 minute read)

Most households in the UK that are connected to the internet are have got a broadband connection. And the vast majority (if not all) broadband packages are charged at a fixed monthly rate - a flat-rate tariff. So UK consumers are quite used to the idea of paying a fixed monthly amount for copious amounts of broadband bandwidth (we're talking Gigabytes of data).

It is only in the last 2 years or so that mobile network operators have truly realised this and started to adjust their internet/data tariffs to bill in a similar way to home broadband packages. So for example, 3 give you "unlimited" - actually just upto 1 GB - internet usage for £5 a month added onto your existing contract bill. Slowly but surely operators will come out with more offers like this, and eventually I think it will get to the point where every mobile tariff comes with internet usage charges "folded in" and taken care of (assuming that as time passes, higher numbers of consumers will demand ever more mobile internet; I think this is realistic).

Anyway, recently I've been keen to start using email on my phone and also do the occasional web browsing, although nothing too heavy. So I started looking around to see which operators offered the best data tariff to suit my needs. I found a blog article reviewing the various offerings written last year - T-Mobile and 3 came out tops. But my existing provider - Vodafone came rock bottom :(

I decided to check out Vodafone's offering and see why it wasn't considered competitive.

A quick look at Vodafone's data rates shows that for all customers who haven't got a specific mobile internet related tariff or tariff add-on, the day-to-day rate is £1 for 15 MB in any given day. Beyond the 15 MB you get charged at £2 per MB. Their flat-rate monthly tariff gives you 120 MB for £7.50. Beyond the 120 MB you get charged at the normal day-to-day rate (i.e. £1 per 15 MB, and then £2 per MB after).

Think about this. If I only use upto 15 MB each day (highly probable since I'm mainly checking email) then it would take me 8 days to use up 120 MB. And so on the day-to-day rate I would pay £8 for that 120 MB. Whereas, on the flat-rate monthly tariff I'd pay £7.50.I save a whopping 50p by moving to the flat-rate monthly tariff :(

But it gets better. On the flat-rate monthly tariff I'd pay £7.50 even if I don't use the internet at all in a given month. Whereas on the day-to-day rate I don't pay anything if I don't use it. Now lets be conservative and assume that on the day-to-day rate, even if you don't use upto 15 MB you get charged £1 (might not be true, but bear with me). Even then it's only worth going on the flat-rate monthly tariff if I use more than 105 MB per month (105 MB would cost £7 when calculated using the day-to-day rate).

But then you might say: what if I need to use more than 15 MB in a given day? Then yes, the flat-rate montly tariff will allow you to use upto 120 MB in a single day before hitting you with the £2 per MB charge. But lets be honest, if you are using more than 15 MB in any given day then it's likely that you'll be doing this on more than one day, and therefore, exceeding the 120 MB boundary in most months.

So what does this tell me? that if I know that I won't be using more than 15 MB in a given day then it's cheaper to stay on the day-to-day rate. Even if I will be using more than 105 MB in a given month is it really worth paying £7.50 per month for a 50p saving? I don't think so.

Having done the analysis I promptly signed up for a contract with T-Mobile. They essentially offer 1 GB of data for as part of their Web 'n' Walk plans, and it doesn't really cost much. And I find it unlikely that I'll ever exceed that limit - it's nice to know that I can browse and email without thinking about how much data I'm using (just like my home broadband connection). I contacted Vodafone to cancel my account with them. When I informed the nice lady on the phone as to why I was leaving her explanation was:

"We only give you 120 MB because we compress all the data we send to you, meaning that you're getting virtually 1 GB of bandwidth anyway"

Oh please. First of all, the "compression" you're referring to is only for web pages. I'm checking email more than anything; unless you control which phone (and therefore which browser) I use or multiple users are going to be reading the exact same email as me from the exact same email server (obviously not the case) I don't think compression matters. And finally, don't tell me it's only Vodafone who have this cool magical compression technology. I'm sure other operators also have this cost-saving feature.

So there. Till now I haven't had a problem with Vodafone. They probably have the best network coverage from what I can tell and their SIM-only deals are good. But as far as data usage goes they're really playing "catch up" (or atleast trying to) with the other networks.

Update: May 2nd

Looks like Vodafone are finally realising what a poor deal they were offering to customers. So now you get 500 MB for your £7.50 per month, which makes it more worth it. Still only half what T-Mobile give you though...

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