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Mobile chiefs warned: Ditch unlimited tariffs... or else

Regulators ready to pounce, says Ovum

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Analysts have warned Asia Pacific mobile operators that they risk alienating customers and incurring the wrath of regulators if they don’t ditch unlimited data tariffs and focus more on quality of service.

The forthcoming Mobile Broadband Industry Survey 2011-12 from analyst house Ovum found that operators are getting the message. Quality of service was ranked by those surveyed as the “most important differentiator in the mobile broadband market” for the first time in four years, supplanting coverage.

However, problems with quality of service persist in regions such as New Zealand, Australia, Singapore, Hong Kong, South Korea and Japan, according to senior analyst, Nicole McCormick.

She told The Reg that operators must continue to invest in networks to avoid data congestion, especially in “key hotspot areas”. Strategies to ensure smoother service could include offloading traffic onto fixed lines where possible and more intelligent pricing designed to encourage off-peak usage.

“Today’s data users are discerning,” she added. “With the rise of smartphones, they expect their data demands to met 24/7, without disruption. It is imperative that operators rise to this challenge or risk disgruntled customers churning.”

McCormick singled out unlimited tariffs for criticism, arguing that they encourage heavy usage and can lead to traffic congestion.

If operators don’t take it upon themselves to improve things, regulators may be forced to step in to impose speed and reliability benchmarks and even to tighten up advertising rules, she added.

The debate is particularly fierce in Hong Kong, where regulator OFTA imposed new rules on Monday designed encourage greater transparency in the industry, following user complaints that "unlimited" tariffs were actually restricted by hard-to-find fair usage policies.

McCormick praised OFTA for being “one of the most progressive and upfront regulators in terms of spectrum allocation in Asia” but slammed three of Hong Kong’s biggest operators who decided not to use the new rules to abandon unlimited data tariffs.

SmarTone, 3 Hong Kong and CSL all announced plans on Monday to offer 5GB tariffs, with users warned that network access management tools would be applied thereafter, possibly impairing data rich applications such as high volume peer-to-peer services.

Looking to the future, McCormick argued that regulators around Asia Pacific need to ensure their LTE spectrum allocations overlap to enable easy roaming on 4G networks, or risk further disruption for customers. ®

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