Service Platforms > Teligen Tariff & Benchmarking

Fixed broadband caps, here we come

by Josie Sephton | Apr 06, 2011

The move by mobile providers to end all you can eat packages has gained dramatic momentum over the past few months Already, many of the 74 providers covered under Teligen's mobile broadband price tracking service, T-Wireless have introduced caps on previously unlimited use offerings.While this wasn't a particularly pleasant pill for many users to swallow, it wasn't entirely unexpected. The dramatic growth in data going over mobile networks, and the impact this was having on service quality meant that something had to give, or at least that if it didn't, users could expect to pay accordingly.

It has been a different story for fixed broadband. While providers in some countries will cap usage: the UK and Ireland for example, are two countries where many providers set usage allowances - it tends to be much less common practice in other countries.

The recent announcement by AT&T that it is introducing data caps and overage fees for residential broadband users just maybe hints that change is blowing in the broadband wind. From the beginning of May, customers using landline DSL will be subject to a usage limit of 150 GB per month, while users of its bundled internet/phone/TV service, U-Verse will get a 250 GB allowance. An overage cost of $10 per 50 GB over and above these limits has been set.

These upper limits are certainly not ungenerous for consumers, and are at the upper end of many of the caps in place across the various providers that Teligen tracks. And the majority of customers are unlikely to be impacted by these caps, according to AT&T, which claims that, for example, an average DSL customer only uses around 18 GB a month, and that only 2% of subscribers will be affected by the introduction of the upper limit. Even with consumers' desire for more and more bandwidth, there is still enough slack in these caps to allow for a significant increase over current usage for many - providing, of course, that these caps do not shrink over time. Furthermore, in a move that many mobile broadband providers would do well to take note of, the provider has committed to keep customers informed of their usage, notifying them when they hit 65%, 90% and 100% of their monthly allowance, as well as providing an online tool to allow customer to check usage whenever they want. The knock on effect of this is that users will have a much greater appreciation of how much data they actually use, which is no bad thing, as many simply do not have a handle on this at the moment.

As and when these caps come into force, users will doubtless complain - much as they did with mobile broadband caps. Some will worry about overage charges, while others will bemoan the fact that the caps are set so high that they are paying for bandwidth they simply won't use (which is kind of ironic, if they have come from a world where they were paying for unlimited usage). From a provider perspective, it is very much a case of damned if you do, damned if you don't. The 'trick' for them is to strike the right balance between fairness - if you use, you pay - and simplicity/transparency, by not creating too many layers around broadband pricing. We only need to look at mobile voice pricing to see that offering too many packages isn-t a particularly good idea, as discussed in a recent post.

We can probably expect to see providers follow AT&T's lead in fixed broadband pricing. But before the critics start on the inevitable tirade against them, it is worth remembering that genuine flat rate pricing across comms services is not as prevalent as we would all like to believe - a closer look at service terms and conditions will reveal that.

Previous Post: TCO - Changes in March | Next Post: Swisscom refreshes Liberty tariffs and Vodafone Spain introduces XS8

Let's talk

Now you know a little about us, get in touch and tell us what your business problem is.
Inquiry / Message:

please enter captcha from left