Commentary: How fair are “unlimited” internet fair usage limits?

June 3rd, 2010

“Unlimited internet” mobile contracts aren’t actually unlimited – they have fair usage limits typically around 500MB or 1GB. But just how fair are the fair usage limits? And should they really be advertising these plans as unlimited?

Christmas #14
Creative Commons License photo: kevindooley

Over the last few weeks, we’ve seen a gradual tightening of what “unlimited internet” really means on mobile phones. Three dropped the fair usage limit to 500MB in their recent tariff refresh and introduced a charge of 10p/MB for users exceeding the limit. Meanwhile, Vodafone have always had a fair usage limit of 500MB but are now beginning to introduce a charge of £5 per 500MB for users who exceed their allowance.

The fair usage limit for most “unlimited” internet packages now lies around 500MB to 1GB. The fair usage limit and what happens when you exceed it depends very much on your network and even your tariff. But what does that actually 500MB or 1GB actually mean to the consumer? And is it actually fair to call it “unlimited” when there are well-defined limits?

How much data do we typical use?

This is a tough question to answer. There is little to no data about how much data the typical mobile phone user uses – and there are so many variables. For example consider:

  • Type of phone – Feature phones tend to use very little data whereas smartphones use up loads. I remember browsing the web & checking email on a Sony Ericsson k750i… 1MB would easily last the whole month. On my new HTC Desire, it would barely be enough to load a few webpages. As we move towards smartphones, data consumption is increasing.
  • Applications – If you’ve got a smartphone, it’ll probably be using data 24/7 without you even knowing. For example, my HTC Desire notifies me of new e-mails, the current weather, mentions on Twitter, Facebook profile changes and more. Even when I’m not actively using the phone to do things, it’s often checking online the background. The applications that you have installed on your phone can affect your data usage too: for example the use of applications such as music streaming, video on-demand significantly affect the amount of data you download.
  • Connection speed – If you’ve got a faster connection, you’ll find yourself browsing a lot more webpages and doing a lot more with your smartphone. I notice this all the time – where I live in London I often struggle to get 3G reception and my phone connects to the slower GPRS network instead. It seems to be a matter of luck whether my phone picks up the GPRS network or the high-speed 3G network and it has a huge effect on how I start my morning. If my phone connects to the 3G network I’ll stay in bed to read my e-mails; if it connects to the GPRS network I’ll get up and turn the laptop on.
  • Wi-Fi access – If you’ve got wi-fi access, you’ll use a lot less data. Many people have wi-fi at home, but probably not at work.
  • Consumption patterns – How you use your phone, at what times of the day, etc.

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Creative Commons License photo: orangeacid

According to T-Mobile, I’m currently using data at the rate of 500MB per month. It’s hard to know how this relates to the “typical” user but to give you an idea:- the HTC Desire tends to use more data than other phones; I occasionally have lack of 3G access which would reduce data usage; I don’t have wi-fi access at university/work and I don’t use any video-on-demand or music streaming services. I wouldn’t consider myself to be a particularly heavy data user and so it’s slightly worrying to think that if I was on the Three or Vodafone networks, I would probably have exceeded the fair usage limit by now and been charged extra.

The excuse that we always hear from the mobile networks is that the vast majority of users don’t come anywhere near the fair usage limit. Yet we’re never given a breakdown of data by phone, by tariff type, etc. For example, are customers without smartphones counted? If 99% of people never reach the fair usage limit but only 1% of the population had smartphones, it could still be possible that every single smartphone user exceeded their cap.

Is it fair to call it unlimited?

In December last year, OFCOM ruled that it was reasonable for Vodafone to describe a 500MB internet tariff  as “unlimited”. Since then, we have seen a gradual decrease in what the other networks deem “unlimited” towards this 500MB figure.

My personal feeling is this. Regardless of whether 500MB is enough to be virtually unlimited and regardless of how few or many people reach that limit, the networks should be open and honest about what the limit is. Instead something is “unlimited” and then hiding a limit in the small print, they should tell customers that upfront and in their marketing. There are several reasons for this:

  • It avoids surprises. Customers signing up for “unlimited” internet and then finding out it’s only 500MB ain’t gonna be happy customers in the long run. This is particularly important for the networks which charge customers for exceeding their “fair usage” limit. Hidden costs and unexpected bills are a huge worry for many consumers.
  • It’s a key differentiation point between different networks and tariffs. “How unlimited is plan X/Y/Z?” is one of the questions that readers ask me again and again. When I wrote my guide on mobile internet fair usage policies, I probably spent 2 hours, at least, searching through craftily hidden pages on the websites of mobile operators and hidden in the small print of contracts. Customers shouldn’t need to do that just to obtain the information to make an informed decision on mobile tariffs.
  • The networks may worry about losing customers if they suddenly advertise their package as having “500MB internet” as opposed to “unlimited internet”. I’d say that only people who’d really be put off would be those who regularly come close to using that much: the customers which “over-utilise network resources and cause congestion problems for other customers” and the same customers which will post angry comments on online forums about exceeding their fair usage limits and hidden charges. The “vast majority of customers who never exceed the fair usage limit” shouldn’t be put off signing up.

Spinning around....
Creative Commons License photo: David Prior

My Recommendations

  • All networks should advertise the fair usage limit on their internet packages if they have one as opposed to calling them “unlimited”. This is mainly for honesty, clarity and to make it easier for customers to compare tariffs between networks. However I think we also need to make a distinction about what type of limit that is. If there are charges for exceeding the limit, the tariff should certainly never, ever be advertised as “unlimited”. If it’s a “soft” limit in that “We reserve the right to throttle/slow down your connection” then you could probably still make the case for that being unlimited enough.
  • All networks should publish a page detailing the fair usage limits and the excess charges for all of their packages. Customers shouldn’t have to read through pages of small print to find the limit for their package.
  • Networks should notify users and require user confirmation before excess charges are applied. This might mean disabling internet connectivity at 500MB and asking users to confirm (perhaps by text message) that they are aware they’ve reach the limit and will now be charged extra.

Your thoughts

I’d love to hear your experiences with “fair usage” limits. Do you think it’s time for a bit more clarity in the market, or are the networks well within their right to call these packages unlimited? Drop us a comment below; we’d love to hear from you.

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About Ken

Ken Lo

My passion is helping people to get the most out of their mobile phone. I've been blogging at Ken's Tech Tips since 2005.

Aside from writing about mobile technology, my interests are in software development, digital marketing and physics. Outside of the blog, I work with numerous technology companies helping them to explain their product and helping them to market it to consumers. Please get in touch for more information.

Your Comments

We'd love to hear your thoughts and any questions you may have. So far, we've received 5 comments from readers. You can add your own comment here.

  1. dave said:

    I have an HTC desire too. Started getting the warning texts almost immediately.

    The other nasty, is you cant find out how much data you have actually used out of your allowance unless you go through the pain of phoning 3 customer services and all those options about stuff.

    So you dont even know where you are with regards to your usage, and cant find out easily. And if you do go over, 10p a MB, that is £50 for another 500mb of data?

    Wow, thats a lot of money. And as we know, the HTC desire is a phone made to consume bandwidth. You have streaming video, big webpages, music, its all there.

    I downloaded 499kb of a pdf file in about 1 second. That is 1% of my allowance gone in a second.

    500mb? 3 really need to do something, because this limit is way too restrictive if you want to use your phone in the way that it was meant to be used. 500mb just isnt fair at all.

    1. Ken Lo
      Ken replied:

      Good news Dave is that you should get an upgrade to 1GB in the next two weeks 🙂

    2. harry replied:

      you can use widgets and apps to control and monitor your internet use. try 3g watchdog and apndroid

  2. Ed said:

    It’s a big annoyance for me too; I also have the Desire, came here after searching “3 mobile unlimited internet is a lie”.

    My plan is, if I ever breach the FUP limit (likely, given the “boy cries wolf” nature of the “you have almost reached the limit of your unlimited internet” texts I receive from 3 EVERY SINGLE DAY), is to pay a third of the extra charge, then when they phone up to ask where the rest of the money is I’ll say that I paid an infinite amount of money, but that it’s subject to a Fair Use Policy. 😉

    500Mb is an extremely feeble amount of data for a superphone. 10 minutes on Google Maps will have that for breakfast.

    Ed

  3. Chris said:

    Does this now mean memory card sellers selling 512meg cards can claim they are unlimited too?

    IMO its far deeper than just unreasonable, its a total rip off. 500 Meg is not a lot of data, maybe a 5GB limit would be more than most reasonable people will require but 500MB is very restrictive, therefore surely a description of Unlimited is just a down right lie?

    I also have the HTC Desire and stumbled accross this page after searching for o2 fair use policy on data as it was never discussed on ordering the phone.

    Im very dissapointed other countries get limits much higher, I think it was finland I read got around 24GB on their fair use policies, so why cant we have similar?

    If the argument is most people dont use more than 500MB, then why use a 500MB limit? surely if the majority use little data, the networks arent heavily suffering?

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