Digital Life

Vodafone CEO hits out at rivals' data 'rip off'

Vodafone CEO Bill Morrow says Australian mobile telecommunications companies are ripping off customers by making use of a trick which allows them to round up mobile data "sessions" to make data vanish quicker.

The comments were made at a briefing at the company's North Sydney office, where Mr Morrow revealed the company's 4G LTE network would go live in June. Vodafone is the last major carrier to roll-out such a network in Australia, but claims that when it goes live it will be the fastest in the country thanks to its better spectrum allocation.

Vodafone CEO Bill Morrow.
Vodafone CEO Bill Morrow. 

Data trick

The trick Mr Morrow said being used to rip off consumers involved many telcos rounding up mobile data sessions, sometimes to the nearest megabyte instead of kilobyte*, to milk more data usage out of customers.

What Vodafone claims its 4G coverage will look like in Sydney at launch.
What Vodafone claims its 4G coverage will look like in Sydney at launch. 

"People really feel ripped off if they're having to pay for more than what they actually use," Mr Morrow said.

Vodafone used to take advantage of the trick and tried to standardise it across a number of its pre-paid mobile plans earlier this year. It abandoned it after customers “expressed concern”.

Most Australian telcos Fairfax Media surveyed in January that offered a pre-paid mobile services — where the trick to round up data is most common — participated in the practice, although some to a lesser extent.

"Most people don't understand the conventional way that telecom companies have set up their pricing," Mr Morrow said when referring to how some telcos charged for data. "If you're on [your mobile] and you only do one quick transaction then you shouldn't have to pay for something that would be equal to five or ten times that.

A speed test Fairfax conducted on a Vodafone smartphone at Vodafone HQ.
A speed test Fairfax conducted on a Vodafone smartphone at Vodafone HQ. 

"It used to be that you had a minimum number of minutes [the telco] was going to charge you for a voice call whether you ended it in 20 seconds or not and [eventually] you saw kind of a granular pricing scheme [come in] where it got down to per second sort of billing. Well the same thing needs to happen on data," he said.

Mr Morrow said Vodafone was "industry-leading" when it came to charging only for what customers used.

"You'll find many others out there that will call it a transaction or a session [and charge per] megabyte."

4G network

When it is launched in June, Mr Morrow said the company's 4G network would be one of the fastest.

"We will ... at least for a period of time, be the fastest 4G network available in Australia," he said.

He said Vodafone staff were trialling the 4G network now and that when it launched it would be available in major metropolitan centres of Sydney, Perth, Melbourne, Brisbane and Adelaide, Wollongong, Newcastle and the Gold Coast. Speeds of up to 150 megabits per second would be possible on 4G in theory, but speeds much lower are likely, considering mobile towers share data between users. Speeds also depend on a user's distance from a base station.

"[The] five capital cities will be our focus," Mr Morrow said of 4G. "Each one will have a slightly different level of penetration within it in that first phase. [There will be] 1000 sites nationwide by the end of the year."

* How the telcos charge for data:

Vodafone - Charges in 1 kilobyte increments on all pre-paid plans. Was proposing 1 megabyte increments across all plans before it about-faced.
Telstra - Charges in 1 kilobyte increments on most pre-paid plans but does charge in 1 megabyte increments on its "Simplicity" plan.
Optus - Charges in 1 kilobyte increments on 1 pre-paid plan and 1 megabyte increments on 2.
Virgin Mobile - Charges in 60 kilobyte increments on all pre-paid plans.
Red Bull Mobile - Charges in 250 kilobyte increments on all pre-paid plans.
Woolworths Mobile - Charges in 1 megabyte increments on all pre-paid plans.
Boost - Charges in 1 megabyte increments on all pre-paid plans.
Crazy Johns - Charges in 10 kilobyte increments on all pre-paid plans.
Amaysim - Charges in 1 megabyte increments on all pre-paid plans.
Kogan Mobile - Charges in 1 megabyte increments on all pre-paid plans.

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