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July 22, 2008

ACCC must act to protect iPhone ducks

We have a crisis on our hands at the Royal Society for the Prevention of Cruelty to Consumers, what with the declaration of an early start to the equivalent of duck hunting season on the mobile phone customer, following the launch of possibly the most dangerous decoy ever developed — the Apple iPhone.
Already flocks of consumer "ducks" have unwittingly been lured on to the apparently placid waters of the killing zones by the madly attractive iPhone. The inevitable slaughter will shortly begin.
Imagine the grief in homes around the country, as the first monthly accounts from the telcos lob, with confirmation of the fatal wounds suffered by a significant proportion of consumers. For many, it will be a slow and painful demise.
We at the society are determined to warn of the deadly capabilities of the iPhone, and to advocate that authorities like the Australian Competition and Consumer Commission act to protect consumers from unreasonably high mobile data charges, and cynical marketing by carriers.

The iPhone marketing tsunami does not reveal the menacing nature of the iPhone. On the Apple Web site, for instance, it's described as "the iPhone you've been waiting for". That slogan, and the words "phone, iPod and Internet in one fast 3G device", fail to betray the lethal potential.
Functionality like regular Web browsing and email, consulting of Google maps and downloading of video and music, which the promotional material pushes, was designed for markets that don't charge the way Australian mobile networks do.
The ACCC has ignored the fact that Australian networks have paltry free mobile data limits and punitively high charges for excess data, and comprehensively underestimate the average size of Web pages. Vodafone, for instance, has claimed 100MB of data allows users to view 4000 web pages. In fact, the average size of a web page is around 500 KB, and the home page of The Age, for instance, about 784KB — which could cost anything from around 25c to $2 if, for instance, you were paying Telstra's excess or casual data rates. They also allow telcos to put a dollar value on voice minutes, despite the fact that variable flag fall, 30-second call rates and metering intervals make it impossible even for skilled cryptographers to translate those dollars into minutes.
Overseas research suggests iPhone users conduct 50 times more Google searches than other phone users. About 60 per cent of US iPhone owners browse the web daily, and 75 per cent do daily email. German iPhone owners consume 30 times more data, no doubt using the special version of Facebook for iPhone users, Skype for iPhone and a special iPhone chat client.
Unfortunately, media coverage – with the rare exception of last week's LiveWire cover story - has mostly followed the Apple marketing line, rather than focusing on the potentially catastrophic plans for which users have been signing up.
And unlike Canada, where a public petition last week forced Rogers Wireless Communications Inc. to slash its iPhone data charges from $60 per month for 400MB to $30 for a more realistic 5GB, there has been no outcry, despite the fact that Optus and Vodafone's $60 offerings are very similar to those of the Canadian telco.
Vodafone's $69 plan includes just 250MB of data. Optus is the cheapest and therefore safest iPhone carrier. It offers seven iPhone "cap plans" ranging from $19 per month (with a seriously inadequate 100MB of data) to $179 (1GB of data and $1500 voice). Their $70 cap plan provides 700MB of data traffic.
Telstra's plans are difficult to decipher, but predictably far less generous than the competition, and possibly the worst iPhone rates in the world. Telstra quotes "$59 upfront on a $89 package", but that actually translates to a monthly payment of $89: a $60 voice plan with $10 of data, plus a $29 data pack, providing a total of 107MB, after which users will be paying $1 for each additional megabyte.
In the US, customers get unlimited data for $60, plus 450 weekday voice minutes and 200 text messages. In the UK, 02 is even more generous, offering 1200 day-time voice minutes, unlimited data, 500 text messages, and a free 8GB iPhone on an 18-month contract for the equivalent of $60.
Even with the maximum bundles, iPhone users would be wise to carefully monitor usage. And although Telstra has indicated their Big Pond customers at least will have free use of Telstra wi-fi hot spots, novices will almost certainly have problems determining whether they're on a free connection.
Experienced mobile phone users have become painfully aware of the dangers of mobile data, with regular horror stories of excess charges in forums like Whirlpool, which has a new, dedicated iPhone discussion area.
The iPhone hype unfortunately means that thousands of Australians who have been encouraged to buy movies and TV shows and surf the Web with abandon, are, as the saying goes, in more trouble than a Werribee duck.

Posted by cw at July 22, 2008 11:09 AM

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Comments

Hopefully the success of High Data Usage service will drag the Telco's kicking and screaming into the 21st Century when it comes to Data Rates.

That having been said, I haven't used 1/20th of my available data on my iPhone yet. It may be the inability of the App Store and iTMS to work over anything but WiFi, Optus's spotty Suburban and Semi-Rural coverage or the fact that I signed on for 700MB per month.

It could also be that I haven't become truly accustomed to having not only my Record Collection in my Pocket, but also the whole Internet.

Posted by: Dan Woods at July 23, 2008 08:09 AM

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