Comments for Telco Greed Overshadows iPhone 3G Launch

Telco Greed Overshadows iPhone 3G Launch

2008-07-09T00:36:30Z

Yesterday we reported on the outlandish iphone 3G pricing plans of Vodafone New Zealand, which is charging up to $250 per month for data plans and $1129 local currency for the 16 GB phone by itself - a far cry from the $199 Steve Jobs was promoting last month. But Vodafone NZ is not the only telecoms carrier to be rubbing its hands together like a greedy fly in anticipation of the iPhone 3G launch. Here are details of other global plans...

]]> In the US, iSmashPhone has a good summary:

The iPhone 3G will cost $199 (8GB) and $299 (16GB) if:

* You are an AT&T customer and are eligible for an upgrade

* You already have an iPhone

* You are a new customer signing a first time 2 year contract with AT&T

If you don't fall under any of the above 3 criteria, then you will pay $399 (8GB) and $499 (16GB). Again, so much for the $199!

Canadian vendor Rogers has a range of capped data plans, from 400MB for the cheapest service plan ($60 Canadian or $59.23 U.S.) to 2GB for the most expensive ($115 Canadian or $113.64 U.S.).

In the UK, according to a thorough report of global plans by Seeking Alpha:

O2 is the exclusive carrier in the UK. They'll be offering the iPhone in 4 plans. At the entry level, customers will pay a monthly fee of £30. That will buy them 75 minutes of talk time, 125 text messages, and unlimited data. The subsidized cost of the phones will be £99 (8GB) and £159 (16GB).

For those looking to spend more, the tiered plans will escalate in fees to £35, £45 and £75 a month. At the top end, £75 plan, customers will get the phone (8Gb or 16GB) free. They'll receive 3000 minutes of talk time, 500 texts and unlimited data. All of the plans will require an 18 month contract.

Meanwhile in Australia, they are lucky to have ~~two~~ three telcos offering the iphone 3G -- so there is some competition. Again according to Seeking Alpha:

Australian mobile carrier Optus will be offering both post-paid and pre-paid options. Pre-paid, the phone will cost $729 AU (8GB) and $849 AU (16GB) plus usage. For those opting to buy monthly service contracts there will be seven different plans. They'll start at $19/month for 100MB of data and $50 of calls. The highest plan will provide 1GB of data and $1500 of calls, text and more for $179AUS a month.

Telstra (TLS, which will also be offering the iPhone in Australia, announced its iPhone plans on June 30th. Their plans will start at $30 per month "with an upfront cost of $279 for the 8GB model and $399 for the 16GB model." Customers paying $80 a month will get the 8GB phone free. Those paying $100month can choose to get either model at no cost. All plans include free Wi-Fi access at Telstra hotspots and require a 24-month contract.

Update: Alert Aussie commenters pointed out that there is a third option: Vodafone.

Check out Seeking Alpha for pricing plans in other countries.

Conclusion

The upshot is that there's a wide variety of pricing plans on offer globally, each with their own clauses and fine print to assess.

But one thing is for sure, telcos worldwide are expecting to cash in big time on the iphone 3G. The iPhone is one of the best devices on which to experience the Mobile Web, so it's disappointing that telcos are still making it so expensive to do. No wonder the Mobile Web never seems to take off.

Comment from Kat on 2008-07-08

2008-07-09T02:22:25Z

Vodafone in Australia is also offering the iPhone 3G :) So we have three...And also Hutchinson (3 in Australia) has a petition for customers to sign pleading to Apple to allow them to sell the iPhone :-)

For a change, Australia has some competition. I first thought I wouldn't be able to buy an iPhone because Australian Telcos would do what they normally do and charge a mint (typically Telstra has), but considering the prices of data usage through mobile phones at the moment - the other carriers offer competitive deals. Still wish data usage was cheaper in Australia though.

Comment from Brett on 2008-07-08

2008-07-09T02:26:08Z

Hey,
Just thought i'd let you know, Australia actually has 3 telco's getting the iPhone.
Optus, Telstra, and Vodafone.
Also 3 the phone company are also trying to get it for release in Aus.

Comment from Dmitry Paranyushkin on 2008-07-08

2008-07-09T02:52:29Z

O2 is quite good though because they're promising pay as you go plans available later this year for iPhone, which means you can potentially get it (even at a high price), unlock it, and use it with any carrier.

http://o2.co.uk/iphone/paygo

Comment from Kat on 2008-07-08

2008-07-09T03:19:30Z

Latest info for Australian buyers. http://www.news.com.au/technology/story/0,25642,23992868-5016091,00.html

Comment from Billshrink on 2008-07-08

2008-07-09T03:51:21Z

We built an app on our site for users to figure out the true cost of the iphone, and which plan they should get (AT&T, US only).
www.billshrink.com/iphone

http://gizmodo.com/5023036/billshrink-helps-you-pick-the-right-iphone-3g-plan

It's amazing that everyone just assumes it's $199. If you look at the true costs it's much much more.

Comment from Yves Hiernaux on 2008-07-08

2008-07-09T03:58:23Z

In Belgium, there is something singular.

In fact an Iphone cannot be linked to any telco providers. This is written in our laws.

This means all phones are unlocked by default and of course prices are higher.

However, there is one unique reseller (Mobistar). Prices 8Go = 525 € (820 US$), 16 Go = 615 € (965 US$).

So, you should feel lucky !

Comment from Morgan on 2008-07-08

2008-07-09T04:41:09Z

Again, no mention of Apple's role in this. They could allow as many providers as they want, make as many price concessions as they want, and sell it as cheaply as they want. Do you have any clue as to whether, taking into account of their contracts, the telcos will even be profiting from the plans? Or is greed in the eye of the beholder?

The fact is, there is only either smart or stupid pricing. They need to price it exactly where they make the most profit over the long term. Too high, they risk ill will and open the door to future competitors. Too low, they lose money or leave money on the table. I think the issue with anger over this is that the telcos have iPhone fans pegged-- they'll pay whatever to get their fix. In which case it's Apple fan irrationality, not greed, that is at the root of the pricing.

I don't know the exact nature of it, but there's an entitlement mentality about all this that reminds me of music pirates. Don't like the price? Steal it. So I kind of enjoy that this is a hard good and all that happens is a bunch of bluster and complaining until the day thy come out and everyone buys anyway. Or not. It really is A FREE CHOICE. In fact, your free to produce something better and sell it for nothing.

Comment from Dmitry Paranyushkin on 2008-07-08

2008-07-09T04:45:27Z

@Yves

But this is great news and a good business opportunity. Russia is the 3rd market for iPhones (after US and China) and ironically iPhone is not available there. I think I saw estimates somewhere that there are about 500 000 of them in Russia or so...

Anyway, lots of Russians get their iPhones in the US and pay more than $1000 US to have one, cause you need a contract, etc.

So you could start bringing them from Belgium :) especially that they're not locked, so no pain with firmware upgrades...

My only problem is that you can't do videos with them.

Comment from Richard MacManus on 2008-07-08

2008-07-09T04:49:49Z

Morgan, you make a good case. And I was thinking today that we'll likely see a drop in price of the iphone when some Google Android phones come out. Not to mention something amazing that Nokia, Sony-Ericsson and the other existing players may come out with. Right now, the iphone is such a highly hyped phone (with plenty of good reason too) that telcos can charge a high price.

Having said that, I don't know what the margins are for telcos and how much Apple is taking, but in my own backyard (NZ) I'm fairly certain there are some big profits being made by Vodafone. They charge through the nose for top-end Nokias etc too, so they have justified the $250 p/mth etc plans as being comparable with existing mobile web plans. Maybe so, but that's because there are just 2 telcos down here (on different telecoms systems, only Vodafone is GSM) and they can basically charge what they want. So my main point is that this is a high profile example of telcos preventing the mobile web from taking off because they are charging outrageously for consumers to use the best mobile web devices.

Comment from Jon on 2008-07-08

2008-07-09T05:49:13Z

So I was thinking about this today. I am currently under my parents family talk plan and want to get the new iPhone but I would have to pay $499.

Details of the plan
- 3 phones total currently
- All not eligible for upgrade until Oct, 2009

Basically I think an option that I may have is to cancel my current phone and pay the penalty of $175 no tax and essentially purchase a new contract and get the iPhone for $299 (16gb).

So if I can do this, which technically I can...
$175 cancellation
$299 + $27 tax = $326 for iPhone
Total: $501

Versus
$499 + $45 tax = $544 for iPhone

either way I will have a BB 8310 Curve to sell to help re-coup some of the costs.

I would save about $40, but hey if they want to make it hard then I will do it.

thoughts?

Comment from Simone on 2008-07-08

2008-07-09T06:11:59Z

FYI in Italy we're having plans starting at €30 up to over €100, and not even the most expensive ones have unlimited data (1Gb/month is the best Vodafone or TIM offer).
Best choice for europeans seem to be buying an unlocked iphone in US (that should be around €380 at the change) and go for a different carrier (ironically other carriers offer unlimited or close-to-unlimited data at cheaper prices).
Any idea when the $549 "open" iphone will come out in US?

Comment from Mads Kristensen on 2008-07-08

2008-07-09T06:35:42Z

I agree with the comment that Apple themselves may be The Dark Lord in this. Jobs has promised than the basic model of the iPhone 3G won't cost more than 199 USD anywhere - to consumers. But he didn't mention what it would cost to carriers. My bet is that there's a hefty premium on it, which the carriere har to cover through its different plans towards consumers.

In Denmark the plans are so screwed that just thinking about them has me wanting to spill my guts out. But nevertheless the carriere, TeliaSonera, has come out and said that given that you can only lock a customer in for 6 months here in Denmark, there would be no business model for the iPhone, if the plans weren't, well, as they are. Now, they may be lying big time, but comparing to other ways of getting the iPhone here, their plan actually doesn't suck as much as could be expected (and they have been criticized for.

Comment from iphone-is-for-suckers on 2008-07-09

2008-07-09T07:32:44Z

Do you find yourself waiting in line for the movie when it first opens? (Hint: the movie is the same the 3rd week after opening)

Do you wait in line at midnight to be the very first person to buy the new and hottest electronic toys ...
(Hint: chances are good that the version that is shipped later has some more bug fixes - and less manufacturing defects)

Something to think about... what happens if you just said, "I will wait"?

"I will wait for that movie to be on DVD."

"I will wait until after christmas to buy that new gaming console"

"I will wait for the iphone to be reasonably priced."

"And furthermore, I may never buy it..."

OMG the world will (not) end... If you don't want to be played for a sucker then don't act like one.

And please do not complain when the telcos are treating you like suckers .... because you are acting like one!

Comment from Adrian on 2008-07-09

2008-07-09T07:49:04Z

Have you seen most Telco' International Roaming data charges? Vodafone wants between 1 and 3 cent/kb . This is crazy charging ... how do they get away with charging sooo much for an automated service.

This is like a credit card company charging 17% interest on local purchases and 3294% on international purchases.

Comment from Todd on 2008-07-09

2008-07-09T16:52:50Z

What, the telcos are greedy!?!?!? Sarcasm aside, Android may put a big dent in telco's business practices. Factor in WiMax ( Android already up and running on Nokia 810s ) or the mythical 700MHz that Verizon owns, with Android and the days of wine and roses may soon be over.

Comment from Enfield on 2008-07-17

2008-07-17T10:16:43Z

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Comment from kate on 2008-07-17

2008-07-17T11:16:25Z

For Sale Apple iphone 16gb 3g...............$300

Introducing the new iPhone 3G! 3G gives you fast access to the Internet and email over your cellular network. And 3G makes it easier to multitask: When connected via 3G, you can surf the web even while you’re on a call. An iPod, phone, and an internet mobile communicator in one device. 3.5 inch wide touchscreen display with multi-touch support. Comes with a 2 megapixel camera with 16 GB of storage. Runs Mac OS X. Service plan not included.

Features OS Mac OS X v10.4.10
Messaging SMS, Email
Browser HTML (Safari)
Games No
Colors Black(8/16 GB), White (16 GB)
Camera 2 MP, 1600x1200 pixels
- Built-in GPS receiver
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Talk time Up to 10 h

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Comment from Vadim on 2008-07-17

2008-07-17T16:09:55Z

We need a co-op alternative to these telecom companies because the prices they're charging for this and for general phone service is just not acceptable.

An Australian org called FAUC is going to start one if 10,000 people join this campaign:

https://www.thepoint.com/campaigns/fauc

If it launches this means lower prices. If it doesn't we can still put pressure on Vodafone, Telstra et al. to offer more affordable price plans.

Please join and tell your friends!

Comment from Enfield on 2008-07-20

2008-07-20T23:21:29Z

Email address : enfield_group@live.com
rima_comm_ltd@hotmail.com

NINTENDO WII……$250USD
NOKIA N95 8GB…..$400USD
NOKIA N96 16GB….$450USD
IPHONE 16GB………..$350USD
iPHONE 8GB…………$300USD
IPOD 32GB………$350USD
Iphone 3g………$300usd
NOKIA N96………$500USD
PS3 60GB…………..$300USD
SONY ERICSSON XPERIA X1……$450USD
SONY ERICSSON G900………..$400usd

AND MANY MORE…………

NOKIA N96 16GB SPECIFICATION

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55 NORTH CROSS ROAD
EAST DULWICH
LONDON
UNITED KINGDOM
TEL:+447045728646
Email: enfield_group@live.com
rima_comm_ltd@hotmail.com

You can also have live chat with us on (rima_comm_ltd@hotmail.com).

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2008-08-02T12:21:59Z

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Pioneer Pro DJ Mixer----------------$300.00
Pioneer System Case (CA-CMX5).......$350.00
Pioneer CDJ-800MK2 Digital Vinyl Turntable=--$420.00
Pioneer Dual Rackmount CD Player--------$500.00
Pioneer Pro DJ Mixer (Black)-------------$620.00
Pioneer Rack mount pro DJ mixer---------$680.00
Pioneer Pro DJ Mixer (Silver)------------$600.00
Pioneer Pro DJ Mixer (Silver)............$700.00
Pioneer Super DJ mixer - Pioneer DJM909------$900.00
Pioneer DJM-600-------------------------------$750.00
Pioneer CDJ 800 MK II / DJM 600 CD DJ Package----$1,800.00
Pioneer DJM-1000 Mixer--------------$2,200.00
Pioneer Model: DJM-600K--------------$800.00

TO PLACE ORDERS/TO BUY/MAKE AN ENQUIRY,:::KINDLY EMAIL US
TODAY
AT.....Company's E-mail address below

OMEGA COMMUNICATIONS LTD
Registered No. 02831796
UNITER HOUSE, 3 RADFORD WAY, BILLERICAY, ESSEX, CM12 0DX

E-mail::(jeffdan1960@yahoo.com)
(jeff_dan1470@hotmail.com)

Tel:+44 7045754055,+44 70457054055

WE HAVE A 24HOURS EMAILING NETWORK,SO ALWAYS CHECK YOUR
EMAILS(INBOX,JUNKS/SPAM FILTERS FOR OUR MESSAGES/REPLIES).

Yours Sincerely,
Sales Team

Comment from Douglas on 2008-08-02

2008-08-02T14:39:49Z

Nokia phones are the best phone investment that you could make. Year after year they have been providing quality phones for consumers. Unfortunately the new Nokia phones can cost you an arm and a leg, especially an unlocked Nokia 5300. I found a great site to find unlocked Nokia cell phones from auctions. I bought 2 Nokia 5300 cell phones for me and my wife, and we love them. Check them out at Unlocked Nokia Cell Phone Auctions. Just my 2 cents.