Vodafone: Unlimited Mobile Internet Offered for Free

IanFogg | May 01, 2008, 04:37 PM

This move by Vodafone is a game changer for mobile Internet usage. In short they are offering mobile Internet access for free to their contract customers. The data limit is generous too: 500Mb (Which is an enormous amount to use on a mobile handset. I consider myself a heavy user, and I consume just 200-300Mb mobile data per month.)

For comparison, T-Mobile UK offer a mobile Internet add-on for UKP7.50 a month, with a 1Gb fair use limit.

This has many many implications. It removes one of the major barriers for consumers to try out mobile Internet. It should help Vodafone to defend its contract average revenue per customer, and will increases differentiation for contract tariffs over pre-pay.

iPhone pricing now looks like an even less attractive offer. Up to now, the circa 270ukp iPhone handset price and 35ukp monthly tariff (and up) costs were offset by the unlimited mobile Internet data O2/Apple included. Now, that advantage vanishes. iPhone will now have to compete with Nokia smartphones, offered for free, and combined with tariffs starting at 25ukp a month with free mobile Internet access. Those Nokia smartphones also have HSPA 3G broadband speeds, not the iPhone's dial-up speed EDGE. I expect O2/Apple to react by further dropping iPhone prices.

The other aspect that intrigues me is how Vodafone will discourage laptop owners from usage. This tariff appears good enough that some Vodafone customers may choose not to pay for mobile laptop broadband access. As 3 has demonstrated, there is a lot of pent up demand among laptop owners for good value mobile Internet access. The devil here will be in the detail of the Vodafone tariff.

The impact for the other operators will be just as great. This announcement will have aftershocks that will be felt throughout the mobile industry.

More to follow, when my French colleagues return to the office after May day.