What is a reasonable pricing for mobile？

Guest column: What is a reasonable pricing structure for mobile data services?

byWang Feng

In the latest Interfax TMT guest column, Wang Feng, an independent IT and telecom analyst, looks at the pricing of mobile data services. He argues that currently, there is too wide a gulf in charging between general packages and those tailored towards heavy users of data services. Translated from the original Chinese by Zhang Danwei.

Shanghai. February 20. INTERFAX-CHINA - With the release of 3G licenses, operators have begun adjusting their data service fees. China Mobile lowered its basic data fee from RMB 0.03 ($0.0044) per kilobyte (kB) to RMB 0.01 ($0.0015) per kB.

However, some people think that the basic data fee should be lowered even further to RMB 0.001 per kB, while others argue that this is unnecessary, as the pre-paid RMB 5 ($0.73) package that grants a data allowance of 30 megabytes (MBs) per month is not expensive.

What, then, is a reasonable price for data transmission services?

Many people lose a large amount of money when they use WAP services for the first time. A friend of mine once spent more than RMB 90 ($13.17) on downloading a 3 MB song from a WAP site, when data was still charged at RMB 0.03 ($0.0044) per kB. Another friend of mine bought a Blackberry without any promotional service packages, and ended up paying RMB 200 ($29.27) on his first bill for data usage.

Let us look at an example monthly bill for a China Mobile user:

Package fees		WVAS fees
Family Plan package	RMB 10	SMS	6.70
Changyou 08 Business Trip package	RMB 68	GPRS	746.94
		WLAN	0.65
			Total (after allowances from packages): RMB 486.35

The customer's data usage for the month of December was 35 MB, which cost him RMB 747 ($109.18) before the discounts from his various pre-paid packages kicked in. Even after these discounts were taken into account, he still had to pay RMB 486.35 ($71.18), mostly for data use.

The reason for the heavy charge is that he did not use any pre-paid packages specifically geared towards data services. We can see the difference it would have made to his bill if he had done so.

If the user had subscribed to the RMB 20($2.93)pre-paid data package that includes 50 MB of data use per month, according to my calculation, he would have paid just RMB 6.35 ($0.93) on this bill.

So the user ended up spending an extra RMB 480 ($70.25) just because he did not subscribe to a pre-paid data package.

This means that on a per-kilobyte basis, people who do not use a pre-paid data package pay about 60 times more than those who use the RMB 5 ($0.73) for 30 MB per month package. I think it is unreasonable that the disparity should be so great.

Operators should respect consumer rights and charge all users the same for data usage. An example of a pricing scheme operators could use could be RMB 5 ($0.73) per month for up to 30 MB, RMB 10 ($1.46) per month for between 30 MB to 50 MB and RMB 20 ($2.93) for 50 MB to 100 MB of data flow.

Towards the end of the billing month, operators tend to find that a user's data flow will dip, as the user becomes wary of accidentally exceeding their data allowance. Altering the pricing would change this.

To sum up, my points are:

1. I support reasonable data fee standards, whether that is RMB 5 ($0.73) for 30 MB per month or RMB 10 ($1.46) for 50 MB per month, as long as it suits the telecom market.

2. The difference in charges for those using a data package and those not using one should be smaller. The current difference is in no way acceptable.

3. Operators should develop more means to allow users to easily check the amount of data they have sent and received. Methods could include SMS, service hotlines and online checking. Currently, there is only online checking (although China Mobile's Beijing subsidiary opened a hotline for users to check their data usage in January 2009).

4. The price charged for using more than the monthly data allowance should be reasonable.

5. Anomalies, such as the high cost of downloading a single song, should be addressed. It is not acceptable to charge more than RMB 10 ($1.46) for a 3 MB song.

Wang Feng currently works at real estate exchange Web site Soufun.com where he is responsible for value-added services. He has served as a specialist for the Data Center of China Internet (DCCI). His blog can be found at http://blog.sina.com.cn/wanghero

The above is a personal opinion piece by the author. Its publication in no way implies that Interfax shares the views expressed in the article.

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本文是interfax转载并翻译我的文章，中文原文是 我的写 《手机上网的合理资费 》