Hold off on 4G for now

Business Spectator 27 September 2012

By now everyone has read about the benefits of 4G-enabled smartphones including the iPhone 5 and Samsung Galaxy S3 4G.

The key change from 3G is the increased data connection speeds possible with 4G. Early adopters may achieve connection download speeds of more than 30 Mbps and upload speeds of more than 20 Mbps.

But before you jump head first into one of the telcos new 4G plans, consider what’s happening in the US.

The US is further along in their 4G endeavours than Australia. Carriers offer 4G plans that range from 200 MB through to 20 GB per month.

A quick comparison shows that in the US customers should expect to get 2-3 GB per month data allowance for the same cost that Australians will pay for 200-250 MB. For the cost of the average Australian 4G per month data plans customers in the US can expect to get 16-20 GB per month.

What does this mean? Don't sign up for a one or two year 4G contract!

We should expect rapid change to Australian 4G plans and with each revision we should expect to see the included monthly data allowances increase significantly.

Any plan that includes less than 3 GB monthly data allowance is likely to be far too small for typical 4G smart phone usage. US carriers offering 12-16 GB per month are in the ball park for 4G.

Remember that 4G offers faster data speeds than ADSL2+ and most people have ADSL2+ data plans that include 20 GB or more per month. The difference is that ADSL2+ is only at home, whereas our smart phones go with us everywhere we go. It is logical that we would want to use the 4G smart phone more than our home ADSL2+ connections.

The trap of bill shock

Low data allowances and increased speed has added yet another danger to Australia’s 4G plans – it’s increased the chances of being stuck by bill shock.

Keeping track of data usage is difficult andwith the smartphone offering so many internet enabled features, it’s easy for users fall into the trap of exceeding their monthly data allowance.

It is important to realise that with a 4G phone everyone should expect to use more data than they did with older 3G phones.

The Australian Communications and Media Authority (ACMA) and the Australian Consumer Network are concerned that people using 4G phones will exceed data allowances and be faced with bill shock in coming months.

ACMA said: "users could use more data than they're used to and may experience bill shock as a result".

To complicate matters, a new voluntary industry code will commence on October 27 and under this code carriers will offer standard pricing information similar to the changes to pricing information that occurred in super markets so consumers could more easily compare product prices.

However, the introduction of the voluntary code will be slow and carriers will not be required to offer detailed information on consumer plans until 1 March 2013.

Despite this, some of the carriers have commenced providing customers with data usage warnings that were detailed in the new code. 

A Telstra spokesman told Fairfax: "Our post-paid mobile customers receive usage alerts when they reach 80 per cent and 100 per cent of their data allowance. iPhone and android customers can also access the Telstra 24x7 app which shows at a glance how much data they've used compared with their allowance."

Optus also told Fairfax: "that its customers received a text message when they've used 50 per cent, 85 per cent and 100 per cent of their included value and data allowances. It also has the My Optus app which allows customers to check their use and recharge their credit."

Avoiding a 4G sting

The best way to avoid the sting is to not sign up to 4G at all. Not yet at least.

But if you must have the fastest mobile internet around, hunt around. Find a low cost handset provider and buy your handset before looking for a carrier. Discussion on where to purchase a handset can be found on whirlpool.net.au.

Another approach is to wait until the Windows 8 phones hit the market later this year and the extra competition should force suppliers to reduce handset prices.

Where possible make sure you utilise free Wi-Fi hotspots and remember to turn your phone off when it is not in use. Unless you really need to, turn off all apps that utilise location information, as they will be constantly reporting your location and this means more data usage.

Also, download an app that will monitor and report your data usage and remember to keep track of what you’re using your smartphone for so that you can identify activities that use too much data.

Australian customers should demand at every opportunity that the carriers offer more realistic plans. The low cost 4G plans should start with 3 GB included data per month and typical plans should offer 10 GB included data per month.

Mark Gregory Senior Lecturer in Electrical and Computer Engineering at RMIT University