Optus boss warns on bill shock
Telstra, Optus and Vodafone are banking on more customers switching to 4G networks to boost their revenues as growth in mobile subscriber numbers dwindles.
"We do believe there is a huge growth potential for 4G in the marketplace," Mr Russell said.
"But if you get penalised if you go over your allowance and you stop using or you change your behaviour as a result that is going to, in my view, stop this growth opportunity."
The Optus boss believes the key to winning the 4G race is giving data-hungry customers certainty over how much they will pay for their data usage. He said telcos needed to put in place a plan that encouraged or allowed customers to use their smartphones as much as they wanted to.
This meant telco plans, especially regarding pricing, needed to be predictable and affordable so customers could download or use data on the super-fast 4G network.
Telstra is leading the charge in rolling out 4G. Its network is expected to cover 85 per cent of Australia by the end of this year. Optus will cover 70 per cent of the metropolitan population by mid-2014. Vodafone launched its service in June.
The Optus boss said telcos ran the risk of repeating their mistakes in handling international roaming charges if they did not pre-empt the brewing concerns over data usage as more people sign up to 4G.
"International roaming is a fascinating case study for the industry," he said. "There has been a high price point, increasing customer concerns on high roaming bills. Industry has not addressed it.
"Now less and less people roam when they are overseas. I think if we don't address data breakage head-on in 4G the same will happen in 4G."
Mr Russell, who is trying to revitalise the country's second largest carrier after a period of stagnant growth, predicted the shared data plan, which allows subscribers to use a single data pact for multiple devices, is the future.
"I don't believe in a market where you have a separate subscription for every single device. I think that is very un-customer friendly, not consistent with where the market is going to go," he said.
"I think you as a customer will have a single subscription, which you will use and access from multiple devices and you will share that data plan from multiple points."
Gordon Ballantyne, Telstra's senior executive in charge of customer facing business, said it would introduce shared data plans in coming months.
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Optus CEO Kevin Russell warned telcos to tackle 'bill shock' — unexpected high charges from heavy data use — as more customers switch to 4G. He said if customers get penalised for going over allowances they may change behaviour and reduce data use, which could blunt 4G revenue growth. For investors, this highlights a customer-risk that could affect future telco earnings if providers don't offer predictable pricing.
The article says Telstra, Optus and Vodafone are banking on customers switching to 4G to boost revenues because overall mobile subscriber growth is slowing. Higher 4G usage can drive data monetisation — but only if pricing and plans encourage, rather than deter, heavy data use.
Kevin Russell argued the key to winning the 4G race is giving data-hungry customers certainty over what they'll pay. Predictable, affordable plans reduce the fear of bill shock and encourage customers to use more data on super-fast 4G networks, supporting sustained revenue growth.
A shared data plan lets subscribers use a single data allowance across multiple devices instead of separate subscriptions for each device. Russell said this is more customer-friendly and consistent with market trends, and he predicts shared plans will become the norm.
The article notes Telstra expected its 4G network to cover 85% of Australia by the end of the year, Optus planned to cover 70% of the metropolitan population by mid-2014, and Vodafone had launched its 4G service in June.
Russell said international roaming is a cautionary case: high roaming bills created customer concern that the industry failed to address, and fewer people now roam. He warned telcos risk repeating that mistake with 4G if they don't proactively manage data breakage and pricing.
According to the article, being penalised for exceeding data allowances can lead customers to reduce usage or stop using services, which would limit the growth opportunity from 4G. Predictable allowances and fair pricing are therefore important to sustain usage and revenues.
The article highlights that Telstra is rapidly rolling out 4G, Optus is expanding metropolitan coverage, Vodafone has launched 4G, and Telstra planned to introduce shared data plans in coming months. Industry leaders are also urging more predictable and affordable pricing to avoid bill shock as 4G adoption rises.
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