iPhone Tethering: Double-dipping and a mobile broadband smokescreen? June 12, 2009
Posted by wirelessinformatics in Mobile Operator, User Experience.trackback
Maybe I’ve been living in a cave or something, because this practice is new to me.
O2 UK are charging 3G iPhone users a minimum of £14.68 a month if they wish to use their handset as a tethered modem even if they have an unlimited* data plan in place.
For those unfamiliar with this practice, tethering means connecting your handset to your PC (either via cable, Bluetooth or iR) and using it as a 3G broadband modem (much in the same way as a 3G dongle/air card etc). It’s a practice commonly used by business travellers who just want to sync up their email without having to pay for extortionate wifi access.
Am I the only one that thinks this is double-dipping on the part of the operator?
A little digging shows that this is standard practice in many other countries, most notably in the US where some tethering plans run at up to US$40 (on top of an existing data plan).
O2 has attracted some criticism for this announcement and the company’s twitter feed follows the party line in suggesting that tethering costs more as it uses more data.
The argument is that the data pull from a PC is greater than that from a handset. They also assume that adding connectivity to the laptop will move a users away from simple browsing to bandwidth hungry use cases such as torrenting. I still call this double dipping and the cynic within would venture that this is a smokescreen to ensure anyone that wants mobile broadband does so through a second-subscription and an operator-sold dongle / pc-card.
1) *Even unlimited data plans have a fair use policy. In O2’s case it seems to be about 1GB. If you exceed this, your operator will typically notify you and charge you or ask you to limit your use. Why does this allowance not apply to a tethered connection?
Yes, a tethered connection is ‘hungrier’ based on a richer web experience. But this is irrelevant surely? An O2 customer has already signed up to the unlimited data / fair use policy under their existing tariff so it shouldn’t matter how I use this data allowance. If I go over my limit quicker than usual because I’m using a tethered connection then that’s my fault and I’ll accept the punishment.
2) Many users who like to make an occasional tethered connection do so for small, low data use cases; for example syncing up an email account while travelling. Slapping them with an additional charge and allowance that they’d likely never reach seems somewhat distracted from reality.
3) The O2 / iPhone charge of £14.68 for 3GB of tethered data is identical to the charge for pay monthly mobile broadband (3GB allowance) – is this a strategy to ensure users who want mobile broadband do so through a separate mobile broadband tariff?
4) The O2 tethered ‘bolt-on’ is essentially the Pay Monthly mobile broadband tariff – will O2 be reporting tethered connections as a ‘mobile broadband’ subscription to embellish their mobile broadband connections?
5) This exposes the fallacy of the industry’s general approach to billing / tariffs.
Unlimited mobile data in reality means 500mb-1GB. An operator will use ‘unlimited’ as a strong advertising statement to attract users, knowing that 99% of them won’t even get near the fair use 500mb-1GB and that margins / network performance are protected. Is this a reaction to internal concern that when a handset is used as a tethered modem, a higher percentage of users will reach the allowance they have actually paid for?
6) Does this just apply to the iPhone on the O2 network? if so, why? There seem to be many happy Nokia owners tethering on the O2 network.
7) How can the tethered connection be detected? How does the network recognise where packet data is being sent to? It’s being requested via the handset so I assume the iPhone has a module that detects a peripheral USB connection.
7) Tethering to add an internet connection to a PC is nothing new. I was doing it several years ago via a GPRS connection. Some in the industry continue to embrace it and make it more accessible while others seem to view it as disruptive to their ‘dongle’ business and do what they can to bury it / make it financially restrictive.
If consumers took notice of the mobile broadband marketing schemes, they could be find that they could get a fast broadband connection no matter where they are located
Interesting post, and highlighting a story which is sure to get some visibility due to the iPhone gravitas.
On a similar note, there was an interesting article on the Register (http://www.theregister.co.uk/2009/06/15/pre_tethering/) which actually suggests that Palm requested a dev wiki remove all referneces to using the Palm Pre in tethered mode – to reduce the risk of upsetting Sprint, in advance of their exclusive launch with highly anticipated device – see http://predev.wikidot.com/tethering for the Wiki response. which states “In a posting on the Wiki, the owner said that Palm has been in touch and politely explained that for the duration of Sprint’s exclusivity, and perhaps beyond, Palm doesn’t want to see the Pre being used as a tethered dongle. The Dev Wiki doesn’t want to upset Palm and so has removed all discussion groups, and IRC channels, relating to connecting a laptop to the internet through a Pre.”
If this is about the increased propensity to use data on the network, and adoption of technology, then it seems somewhat counter productive for the Operators to take this approach.
In North America this has been a standard practice, Verizon Wireless and other CDMA carriers have been charging tethering fees for four years plus. AT&T introduced this fee shortly before the iPhone was released.
We are still waiting to see how T-Mobile US will handle this with their 3g Data push. First attempt was to have a 5gb limit on their 3g data devices, however consumers who were exceeding that limit would run into 1000$ plus overage charges. This is now under review and to be changed.
Carriers seem to be making a big push away from tethering tactics and moving towards “USB PC cards”. The average handset user is usually surprised to find out their device can be tethered.
Educating consumers is a huge opportunity for all carriers and companies in the wireless market; consumers are not aware all the standard features newer phones have. Younger generations buying Blackberries just because it is a “cool phone” not really knowing the core functions of these devices, and by time they start to understand the next cool phone is release and they Upgrade.
Carries in the US have also had a limit on their “Unlimited” Data, and the consumers would suffer outrageous cost, and or temporary disconnect from their service. Of course all this is laid out in the fine print of the 20 page contract agreement with your Carrier, driving unneeded calls and complaints.
In short, providing education on features for carriers, and features of devices is an open market “Cell Phone” consultants are now making their way into the cooperate and consumer market .
Compared to Europe Every phone company in US/ North America is Double dipping .. by charging both incoming and outgoing calls ..except some recent unlimited plans and free incoming plans .
))))
I thought double dipping in illegal in US
[...] As such, many MNOs are doing a lot to upgrade their networks as quickly as possible in order to accommodate demand. However, when MNOs see data traffic increasing they sometimes react in a less than favorable manner by capping usage or imposing punitive charges. [...]