IPhone users warned of ‘bill shock’

New data plans needed to provide mobile internet cost certainty

The arrival of the iPhone in New Zealand later this year will put the heat on mobile operators to deliver improved data plans and coverage as users embrace mobile internet applications.

Rosalie Nelson, telecommunications research manager at analyst firm IDC New Zealand, says Vodafone’s iPhone deal, announced last week, will challenge today’s pricing for mobile broadband data.

Vodafone will not want to cannibalise its existing data policies, she says. IPhone users will want to use a lot of data, but New Zealand carriers have yet to deliver flat-rate plans to allow this.

When the iPhone was released in the US, users complained of being hit with large and unexpected data charges, she says.

“There is a huge risk of bill-shock,” she says.

Nelson also questions the quality and reach of mobile broadband in New Zealand. Vodafone’s HSDPA high-speed service will work in urban areas, but does not yet cover the entire country.

Vodafone is reportedly planning to roll out further spectrum, which is expected to enable better coverage and be more cost-effective.

“Perhaps Vodafone will hold off [launching the iPhone] until it has done more with the 900MHz spectrum,” she says.

Meanwhile, CIOs will now face the challenge of how to deal with users wanting to run business applications on the iPhone.

Australasian telecomms analyst Paul Budde says Apple’s global deal with Vodafone clearly indicates it is non-exclusive. He says an iPhone announcement by Telecom should not surprise.

Telecom declined to comment on a potential future deal with Apple.

“We are not in a position to elaborate on Telecom’s status with respect to the iPhone at this stage. Our new network, launching in November, will open up a range of exciting handset possibilities, but we’re not revealing our hand just yet,” says Telecom PR manager Rebecca Earl.

A number of players in the local telecommunications market have aspired to get the iPhone deal, but to the majority of them the licensing terms have been too steep and the revenue sharing expectations too high, says Nelson.

In addition, Vodafone could offer a multi-market deal, which the local players could not, she says.

The Apple-Vodafone partnership creates a strong brand alliance, she says.

There have been suggestions that Telecom was also keen to get the first crack at a deal, but Nelson thinks the company’s licensing agreement with Miami-based Brightstar — Telecom’s distributor of handsets — could have been an inhibitor.

Budde says that the deal indicates where the industry will have to move over the next couple of years — partnerships are becoming increasingly important, especially between global companies.

Over the last year, Vodafone has started to reposition itself towards new developments in wireless broadband and mobile data, he says. The company is, for example, operating WiMax systems and cutting down on roaming charges in Europe.

“Vodafone is positioning itself for the new market, and the iPhone fits in very nicely,” Budde says.

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Tags VodafoneiPhoneIDCpaul buddeNetworking & Telecomms ID

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