DISQUS

The Really Mobile Project: Thoughts on O2’s iPhone 3GS offering

  • joshr · 6 months ago
    oh man, i'm so angry with *all* the operators at the moment. 2 things....

    1st. like i said at mobile web 2 summit last week, i don't want to be a "fan of o2" as they want me to, i want them to be invisible (http://twitter.com/joshr/status/2017733189). by which i mean, like a water company. the operators are pipes. now shut up and listen to point 2.

    2nd. I ALREADY HAVE UNLIMITED DATA ON A CONTRACT FROM YOU, WTF!? why should i pay for *more* data on the same fucking device?? huh? you morons.

    you, the operators, are holding us all back with your "marketing lies" (that was me who said that) of unlimited data with fair use, and no, hiding behind your friend the asterix is not a get-out, or an excuse, and borders on illegal (which is why you don't automatically act if people go over. because it doesn't hold up in court that we should have read it. asterix's are used to explain what something really means, not contractually).

    when i say you're holding us back i mean, the devs and the users. i seriously could not believe some of the things coming out of the mouths of the operator reps (they were probably PMs, but acted and sounded like "reps") mouths. think it was o2 saying they'll build (into litmus?) an api to allow devs to warn users through their apps about coming close to data limits.. a million times wrong.

    you hold back the devs because that's ridiculous and means they can't have the freedom they need to innovate because they live in your pocket and in fear of taking the blame from users for your behaviour. and you hold back the users because they don't get to do all the cool stuff devs could build, and are scared of the shocker bill.

    when you wake up and realise you have no USPs other than that you have the ability, unlike the water board, to sell wireless bandwidth, then we can all move on into the future, with happy customers and innovative technological developers. don't step on our toes launching your own shit. seriously, we're better at it than you. just give us a pipe. and we'll pimp it.

    all you're worried about is how you monitise. my advice? learn how to monitise the shit you already got, the bandwidth. overwise move over. (you will eventually be in someone's pocket yourself.)

    call me.

    (this comment is almost the blog post i had planned :)
  • DanLane · 6 months ago
    Before I start, I want you to know that I like you Josh. I enjoy the rare times we get to meet up and I especially enjoyed putting the world to rights last time I saw you. So keep that in mind and know that I'm not just trolling and that this is a genuine response.

    Much of what you've written here is hot air, by that I mean it panders to the vacant popular opinion without addressing the actual issues. Casual observers will read this and think "Fuck yeah, why aren't the operators listening to this guy?" and will leave an encouraging post before moving on and not giving it much more thought.

    What you've done is told us that you're pissed off with operators and you've told us why but you haven't really put yourself in the operators boots (and they are some large boots!) and imagined what you'd have to deal with in order to get things fixed without sinking the company.

    First up, the use of the word unlimited. Let's say you're O2 and you decide to stop using the wording "UNLIMITED" on your marketing material. Congratulations. You get no new customers because everyone goes with the providers still offering "UNLIMITED" packages instead of your own packages which are no longer competitive. Ok you can't stop using the word "UNLIMITED" so you offer mobile broadband access that is truly unlimited. Your users can download whatever they want and instantly the sheep like idiots that make up the general population are instilled with an unjustified sense of entitlement to download as much shit as they possibly can. Your network reaches capacity, grinds to a halt and you get called names by the same idiots that are responsible in the first place while you spend a shitload of cash putting in the extra capacity. This has already happened in the broadband industry. Do you know how many people actually offer truly "UNLIMITED" broadband? hardly anyone! certainly not anyone using BT's wholesale packages - they simply can't afford it. Ironically do you know who is actually offering truly unlimited home broadband? Yup! it's O2! (through their Be connections) and that's not really a business model that stacks up AND it still has a fair use policy!. Andrews and Arnold are a proper small-ish business running an ISP. They have talented people in both business and technical sense. They can't offer a truly unlimited home broadband package because they'll be shafted by their own customers and because of this they often lose customers to companies such as Be who are backed by large companies willing to throw money into this.

    Sorry, got carried away... where was I? Ahh yes, proper unlimited mobile data connections... basically it can't be done without shafting the business. It doesn't work in fixed-line where the infrastructure costs are far lower and it won't work in mobile for a long time to come, if ever. Ultimately it's the greedy end users that are to blame.

    You really should be annoyed at the advertising standards authority. They are the only people who can turn around and put a blanket over the whole industry and stop the word "UNLIMITED" being used. Until then you aren't likely to get a maverick network come along and stop using it and to ask them to is like asking them to shoot themselves in the face... twice.

    In short, you aren't going to get an unlimited connection, but if the ASA grew some stones you might just get rid of that word... for a while.
  • Mac Morrison · 6 months ago
    In short, you aren't going to get an unlimited connection, but if the ASA grew some stones you might just get rid of that word... for a while.

    And theres the rub, toothless lions.
    see also offcom.

    though more complaints across the board *may* help.
    but frankly even the gadget shows attempt to change the use of unlimited - did nothing :(
  • James Whatley · 6 months ago
    Love. It.
  • jimwild · 6 months ago
    Well said.
  • Mike Bradshaw · 6 months ago
    That comment practically is a blog post in and of itsel sir, well said.
  • Denny · 6 months ago
    *applause* :)
  • joshr · 6 months ago
    and another thing!...
  • Mike42 · 6 months ago
    "an api to allow devs to warn users through their apps about coming close to data limits.. a million times wrong."

    er...why? What's wrong with this idea? Your fav app, the one you have open all the time, with the ability to warn you? For years people have whined about NOT having easy visibility of your usage, now O2 offer to enable it, for all to use, and you don't like it. I'm confused.

    Also, it's a numbers game. Think: mobile broadband growth is the ONLY thing paying for all your 3G love. 115% penetration or whatever. Voice/Text is maxed out, and will only get cheaper. ARPU always falls. So in dongles, MNO's have something (the ONLY thing) they can generate extra revenue off. Not mobile TV. Not dating. Not any other off-the-wall ideas.

    Guess what Josh - you cannot build a business case for 3G investment if you cannot make more money off it.

    The dongle costs circa $70. If they can convince you to use your phone, great. But you gotta pay somehow. The 'Unlimited' data on your phone costs - what - £5? And you can't use *that* much. But 'Unlimited' on a laptop? Melt that BTS sucka! (sorry, came over all A-Team for a sec there).

    This is all factored in. £5 for unlimited on your phone, £15 for unlimited on your laptop (via dongle or tether - no difference really). 'cos you use a hell of a lot more on a laptop.

    If someone holding a party offers unlimited drinks (byo glass), you don't expect someone to turn up with a yardglass.

    So don't get upset when the MNO politely asks for some more cash to cover the much larger volume of data you are consuming. And yes, 'Unlimited' sucks. No-one should have ever started using it. I hate the idea. We do not have infinite spectrum. Anyone who thinks they deserve unlimited is wrong. There have to be caps or everyone looses when 1% start running P2P apps.

    /m
  • AJR1 · 6 months ago
    Yes of course we can get angry at it. The price is disgusting. 32GB 3GS in US costs $299 = £184.98, In the UK you charge £274.23 = $443.21
  • Ben Smith · 6 months ago
    There is a gap, but bare in mind the US price does not include any sales tax, which the UK price does. Also the AT&T tarriffs which are subsidising the US model are 24 months, charge a lot more for data ($30 per month!) and exclude any free text messages etc etc so it's not really fair just to compare headline price... You need to compare cost across the whole contract.

    Take a look at these charges... Not sure the UK would like these much:
    http://www.flickr.com/photos/ben_smith_uk/36101...
  • DanLane · 6 months ago
    You're comparing the handset cost of an iPhone 3GS with AT&T subsidy to an iPhone 3GS with O2 subsidy and that just doesn't work. The US and UK are two VERY different markets and those are two very different packages your comparing.

    The US price of $299 comes with a 24 month contract and to get the closest deal to the cheapest UK package you'd have to pay $76.98 per month.

    The closest O2 package to $76.98 per month is the £44.05 one at which point, on a 24 month contract the 32GB 3GS costs £96.89. You also get considerably more minutes and texts than the US AT&T deal.

    Still angry?
  • Ben Smith · 6 months ago
    Hey...! What you said too :-)
  • markwebster · 6 months ago
    Whilst your slant on the current situation is laudable Dan, one wonders if the shareholders are at this moment rubbing their hands with glee at the enormous amount of bad publicity this is generating for O2 on a wide variety of social media outlets, what's worse for them, is a lot of this disgruntlement is coming from die hard Iphone wielding O2 using Apple fans, who will simply be looking elsewhere at contract renewal time.
    UK contact prices for this model are vastly over the top IMO, simply a case of O2 trying to screw faithful customers for as much as they think they can get!
  • DanLane · 6 months ago
    You'd be surprised at how little the shareholders care about the noise generated on Twitter!
  • markwebster · 6 months ago
    They will do, when it appears on the BBC news sometime in the near future :)
    http://www.bbc.co.uk/blogs/technology/2009/06/a...
  • DanLane · 6 months ago
    Trust me, they really won't!
  • Mike42 · 6 months ago
    What - be afraid of publicity? Like Apple has been for the last 2 years of near-continuous drubbing at the hands of the techno-weenies?

    Cut to suburban lounge, circa 2006, about 10:15pm...Marge has just bought Steve in a cup of nice hot tea, and a BBC techno journo is just about launch into a polemic about the new iPhone...

    whinewhinenobluetoothheadsetprofilewhine OOOOO SHINY NEW PHONE LOOK AT THAT DEAR whinewhingebleatmoannoappsupportnotetheringbleat ISN'T IT NICE? howlybagsulknocutnpastesob LOOK AT THAT SCREEN gaaanoremovablebatterymylifeisover MIGHT POP DOWN TO O2 TOMORROW LUV....
  • mj · 6 months ago
    I'm not worried about the subsidy price. That's a given.

    I am a little pissed at the Tethering price. For that price I can get a dongle and have two machines on the net (using less battery power and not tying up my handset for internet). Other mobiles seem to get this free (I used it on a SonyEricsson for a year) and it worked with the same allowances for on-mobile and tethered data. The argument that it uses more data is simply bogus.
  • Ben Smith · 6 months ago
    No, you were simply breaking the T&Cs of your contract... as most people will do with the iPhone when they don't bother to add the bolt-on and realise tethering works anyway...
  • Mike Bradshaw · 6 months ago
    Wow, did not realise that was in the small print on contracts. Is it spelt out in big letters or hidden away in the small print?
  • Ben Smith · 6 months ago
    It's normally hidden away to be fair...
  • DanLane · 6 months ago
    Yeah, I do this with my Three UK X-Series contract but most operators have shifted to a similar model to O2 and now charge extra for "tethered" use (including Three UK on newer contracts than mine).
  • Mike42 · 6 months ago
    only if you use the APN they give you...
  • Justin · 6 months ago
    Good post, I agree with all of that. What are your thoughts on O2 not passing on the price cut for the older 3G model?
  • DanLane · 6 months ago
    The US price drop is on a 24 month contract, the iPhone 3G is already free on all 24 month contracts with O2 and the monthly cost is considerably less than the US equivalent.

    I don't know how they are supposed to drop the price lower than free ;)
  • Justin · 6 months ago
    Ah, didn't realise that, thought the $99 price was not tied to a contract. Makes more sense.

    When I was in Canada I was shocked at how expensive cellphones were, 3 year contracts are the norm and plan prices are stratospheric. Makes the US look cheap.

    J.
  • Matt Heath · 6 months ago
    Hence why the Canadian Mobile Operators are amongst the most profitable in the world currently.

    http://www.researchandmarkets.com/reports/99202...
  • Mike Bradshaw · 6 months ago
    It will be interesting to see if any operator (globally) breaks ranks and does *NOT* charge extra for tethering
  • DanLane · 6 months ago
    On one hand I can see justification for AT&T including tethering in their data bundle as they already charge $30 extra for it... however I can also see them charging another $30 on top of that for tethering :(
  • squawkBOX · 6 months ago
    I'm very interested to see how they can tell the difference between handset and tethered use?
  • jimwild · 6 months ago
    Yeah, I'm interested on this one too. My guess is that Apple have put in a way to alert the network if the iPhone is in tethered mode.
  • DanLane · 6 months ago
    Presumably they will use a different APN for tethered use and they'll charge based on that. If that's the case then my prediction is that shortly after release of 3.0 we'll very quickly see an app for jailbroken handsets that changes the billable APN to use the unlimited one.
  • Mac Morrison · 6 months ago
    oddly the PAYG price for 3G remains the same, and the 16 gig is up to £440 (was £399) and a whooping £538.30 for the 32 gig, or approximately the same price as a sim free N97.
  • jamescoops · 6 months ago
    It is not just about maximising revenues for shareholders. O2 also have a limited amount of bandwidth on their 3G network - which isn't really designed for a load of laptop usage.
  • Mac Morrison · 6 months ago
    errr then why do they push 3G dongles like a hooker in Amsterdam ?
  • bushra · 6 months ago
    bad form for o2 to not stock the N97 direct and then do this to iPhone owners. but they do make exceedingly good broadband.
  • DanLane · 6 months ago
    Assuming you're talking about their fixed-line broadband? It's good because they bought Be Un Limited and, in a shocking move, left them to get on with it without poking their noses in too much ;)
  • bushra · 6 months ago
    that's the one. i get the highest package at a lower rate because i'm a mobile customer too, so i am determined to stick with the network.
  • craik_pyke · 6 months ago
    Rogers, at present, is claiming that if one is subscribed to a >1GB plan, that you'll be able to tether at no additional cost (http://bit.ly/JJd24 -- NB I've called Rogers and confirmed there's no tethering costs for those who are already signed up for a >1GB data plan).

    Of course, that's not taking into consideration that we in Canada get screwed on the pricing anyway. Cheapest plans with 250 minutes voice, 6GB data [limited time special], 2500 SMS is ~$90/month for 36 months, device is $299 subsidised over three years.

    Unsubsidised device cost is around $700-800... With the cost of the plans in Canada, it makes more sense to buy outright and stay out of committed plans.
  • pfig · 6 months ago
    I got my iPhone at the end of March, and got the cheapest one as I knew a new model would be out in a matter of months. I *explicitly* asked about upgrading to the new model (at the High Street Kensington station O2 shop) and I was told "Absolutely, you'll just need to pay for the new phone".

    If they're taking that back now, I'll be extremely pissed off.

    As for the pricing, it's ridiculous that Apple brings it down and O2 moves the entry level from £99 to £184 (and no, the old 3G model doesn't count as entry level as far as I'm concerned - it's "refurbished", at best).
  • Ben Smith · 6 months ago
    No, they're not taking it back... the guy is entirely right. You can just buy a new iPhone 3GS outright and swap the SIM over.

    You will, however, have to pay the full unsubsidised price for the newer handset (i.e. the PAYG price)... just as you would if you wanted to upgrade before the end of any other contract.
  • pfig · 6 months ago
    Ah, I wasn't clear enough: I specifically asked about the pricing, and two different O2 employees told me it would be just like with the previous upgrade, I'd just have to pay the price of the iPhone on my current plan. So I'm writing them a very angry email (unfortunately this was at an O2 store, if it had been over the phone I could ask them to go listen to the recording) and reminding them that those 5 years of exclusivity will eventually run out.
  • pfig · 6 months ago
    As for tethering (a complete rip-off, IMO). just because O2 *can* be blood-sucking leeches, I don't feel it's in their best interests to do so, at least to the extent they want to retain and build a loyal customer base.

    Other than that, I got NetShare before it got yanked from the App Store, so O2 can suck my f*cking lizard :)
  • adambird · 6 months ago
    Excellent commentary. The notion of a business having to make money, even if they are a big-bad network operator is notably missing from many articles from many 'thought leaders' in this space.

    I don't think that the WHO have designated the iPhone as fundamental to living quite yet. So, until they do all those whinging about 'excessive charges' for this and 'outraged at pricing' for that have the oldest option in the free market book, ie don't buy it.

    I'm pretty non-plussed about the new phone which is exactly why O2 have decided not to offer me an incentive to prolong my contract. So, I'll make do. Well, actually I'll probably try and convince my wife to ditch her BlackBerry for a iPhone 3GS and then convince her that she wouldn't make use of the extra battery life as much as I would.

    Can't help but cast my mind forward to next year now, just so long as the battery lasts out.
  • juliancooling · 6 months ago
    My problem is that all of these company's are forcing their users onto 18 month and 24 month contracts for a phone with a very, very public upgrade cycle of 1 year.

    I am fine with them offering longer term contracts for those who want them but all great contracts are all about setting and meeting expectations. People who are forking out for the iPhone may well want an "auto-upgrade" package with a 1 year hardware upgrade built in.

    From O2's persepctive that's great: do the maths and price a package with a bell or a whistle (even both) and put it on the market. It's the only package half the people I know with an iPhone would want. Heck, they may even sign up for a 3 year contract if the hardware was sent out by post on release day direct from the factory.
  • Matt Heath · 6 months ago
    Hence why the Canadian market is amongst the most profitable mobile markets in the world.

    http://www.researchandmarkets.com/reports/99202...