Asian telcos step back to unlimited tariffs

Last week was a shocking week for telcos' future profitability.

After months of encouraging signs that mobile operators were finally starting to come to their senses and move off unlimited data plans, the tide is quickly rising back in favor of all-you-can-eat tariffs.

In Hong Kong CSL, 3 and SmarTone all announced that they will keep their unlimited plans in place, and in the Philippines Smart Communications said it will keep offering unlimited data plans.

These announcements were made despite what seemed to be a strong backlash against unlimited. Both Nicole McCormick and David Kennedy from Ovum commented in TelecomAsia.net recently that there is "solid evidence" that mobile operators were starting to abandon unlimited, flat-rate data plans.

McCormick said: "Ovum has long viewed that unlimited data tariffs are unsustainable because of the traffic growth and management issues they generate." Kennedy said in a Telecom Asia column last issue: "This realization is now filtering through to LTE pricing strategies in leading markets in Asia Pacific."

Well, maybe not!

While cellcos have come up with a number of alternatives to unlimited plans, it seems they're not sitting well with consumers in Asia. The move away from unlimited data in the US has been much smoother. Verizon Wireless reported LTE net additions have not been adversely affected after it cut unlimited plans, after AT&T was first to phase out unlimited mobile data. (Both companies had little choice as their networks were becoming increasingly overloaded.)

But in the part of the world it's back to being competitor focused instead of being customer focused and business focused.

 

As my colleague John Tanner wrote last Tuesday, "Hong Kong’s hypercompetitive market is pressuring cellcos to keep unlimited plans in place at least until everyone is willing to drop them."

SmarTone's flip-flop comes just two weeks after the operator announced it would be the first Hong Kong operator to stop offering unlimited plans in mid-February. The markets welcomed the news with a strong jump in the cellcos' share price, and Barclays Capital said the move would have "modestly positive" impact on revenue. CSL, which also offers volume-based packages, said last year it would phase out unlimited by the end of this year.

Despite their best intentions to move to a sustainable, long-term pricing model, mobile operators can't help but continue to play the numbers game -- never making a move that might risk them losing subs and market share to a competitor, even if they aren't making a decent margin on those subs.

All eyes will be on PCCW, the only Hong Kong operator going through on plans to drop its unlimited option.
 

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