At the same time KPN is meeting in every respect the demands of politicians. There will be no separate charges for the use of specific internet services, such as Skype or WhatsApp. The operator will also allow mobile VoIP in all its variations. KPN is cutting internet speeds though. Whereas it previously offered up to 3.6Mbps download and 2.0Mbps upload, it now has the standard Personal Sim Bel+SMS+Web offer at 2.0Mbps download and 0.1Mbps upload. Customers who want a faster connection can choose the Bel+SMS+WebXL packages which offer up to 7.2Mbps download and 2.0Mbps upload and also cost about EUR 2.50 per month extra. The mid-range subscription with the low upload of 0.1Mbps is unlikely to appeal to Skype users or those interested in uploading photos.
KPN had to to be creative with its new offering in order to present a commercially sustainable model. This means more expensive plans, as the company itself admits. It notes as well that as long as customers choose the ‘right’ plan, it doesn’t necessarily have to be more expensive for the end-user. The question is what does KPN mean exactly by this. Consumer demand is determined by a number of factors, with a variety of criteria, such as price and quality, making the final decision. For example, a driver who makes long trips each day will most likely choose a diesel motor, as this offers comparative savings on petrol.
So a customer who expects to use a lot of data chooses a subscription with a) a lot of MB included b) relatively fast speeds and c) a reasonable price. This raises the question if the customer knows how much a GB or MB really is, if he knows how much he uses when for example he watches a YouTube video, or if he knows that applications are running in the background on his phone. On average the Dutch user of mobile internet gets through 300MB per month, but that varies considerably based on the user and the type of phone. And this amount can also change significantly month to month merely by downloading a new type of app with heavy data consumption.
On to the tariffs. The old (current) tariffs from KPN were relatively positive and compared ok with rival offerings, in part due to per-second billing after the first minute and always 1GB included with the KPN Personal Smart bundle. The new offer is dramatically worse for a regular customer who wants everything, ie voice, SMS and data, in one plan. Previously customers got 1 GB of data with a KPN PS 100 subscription, and this will now be 100MB, just a tenth of the old offer. The amount of data included rises quickly with the tariff plans, as do the monthly prices. Now if the customer wants 1GB, he pays EUR 50 per month (KPN PS Bel+SMS+WebXL 350). The difference in bundles is also odd. KPN now has in addition to its standard PS Bel+SMS+Web plan the offer PS Bel+SMS+webXL. The number of minutes in the WebXL bundle is the same as the Web plan, but for EUR 2.50 per month the customer gets considerably more data, with another 150MB already from the lowest bundle.
This is also an uncertainty in the new tariff structure: customers either get a lot of everything, or everything in little amounts. The transition from Bel+SMS to Bel+SMS+Web is a big step, especially for the data component, while the switch from Bel+SMS+Web to Bel+SMS+WebXL is hardly mentionable. And the fact that with the new subscriptions, which KPN says are entirely centred around mobile data, voice and SMS are linked to mobile internet, the whole picture is muddied: the customer now not only has to pay attention to his use of voice minutes and SMS, but also the amount of data consumed. This is a direct line to the current trend where mobile users are dropping traditional services such as voice and SMS. Choice is good, but overkill is dangerous.
KPN now offers nearly the same minutes/SMS as Vodafone but at a higher price, while T-Mobile in general has lower prices with slightly different bundle sizes. With the cut in MBs, the value-for-money proposition is worse enough that a customer who doesn’t call much but wants mobile data is better off with the competition. Also KPN’s announcement that customers will pay more for smartphones means consumers will not be better off after 5 September.
KPN customers still have the right to change to a higher or lower plan after three months, but then from 5 September they will also see their data allowances cut.
Hi’s changes are largely in line with KPN. KPN already had an all-inclusive bundle, while Hi offered separate subscriptions and data plans (mostly sold together still). At Hi, the amount of SMS in the bundle will be double the number of voice minutes. Where KPN offers WebXL, Hi offers the Hi Messaging bundles. These have more MBs and a faster internet speed and also come standard with 3,000 SMS per month. This is new and will be attractive for young people who text a lot. However these plans start at EUR 37.50 per month, for 120 minutes and 400MB of data.
Nothing will change for roaming, KPN says. With KPN Personal Sim one of the USPs is that roaming use always comes out of the bundle value (at the standard roaming tariffs).
Depending on how much extra KPN charges customers for new smartphones (the company says a few dozen euros) and also if the competition responds with similar pricing, KPN has now positioned itself as the most expensive in the market. If the competition follows with the same strategy, consumers may go looking for alternatives such as Wi-Fi, which is already growing in popularity. For example in Japan, Wi-Fi provider Fon has an agreement with Japanese operator Softbank to use Wi-Fi routers with Apple’s iPhone.
Vodafone said it’s working behind the scenes on new models, but declined to say if it will follow KPN’s lead. Vodafone may focus on dropping the ban on VoIP, SMS over IP and tethering in order to meet the new legal requirements. Vodafone as well as T-Mobile (which did not want to comment on KPN’s plans) would both do themselves good by monitoring the blogs and forums in the coming period, as there is already a raging discussion over KPN’s new path in September – and these aren’t all very positive comments. This also likely is the result of KPN’s recent difficulties in communicating its plans to the market.
KPN had to to be creative with its new offering in order to present a commercially sustainable model. This means more expensive plans, as the company itself admits. It notes as well that as long as customers choose the ‘right’ plan, it doesn’t necessarily have to be more expensive for the end-user. The question is what does KPN mean exactly by this. Consumer demand is determined by a number of factors, with a variety of criteria, such as price and quality, making the final decision. For example, a driver who makes long trips each day will most likely choose a diesel motor, as this offers comparative savings on petrol.
So a customer who expects to use a lot of data chooses a subscription with a) a lot of MB included b) relatively fast speeds and c) a reasonable price. This raises the question if the customer knows how much a GB or MB really is, if he knows how much he uses when for example he watches a YouTube video, or if he knows that applications are running in the background on his phone. On average the Dutch user of mobile internet gets through 300MB per month, but that varies considerably based on the user and the type of phone. And this amount can also change significantly month to month merely by downloading a new type of app with heavy data consumption.
On to the tariffs. The old (current) tariffs from KPN were relatively positive and compared ok with rival offerings, in part due to per-second billing after the first minute and always 1GB included with the KPN Personal Smart bundle. The new offer is dramatically worse for a regular customer who wants everything, ie voice, SMS and data, in one plan. Previously customers got 1 GB of data with a KPN PS 100 subscription, and this will now be 100MB, just a tenth of the old offer. The amount of data included rises quickly with the tariff plans, as do the monthly prices. Now if the customer wants 1GB, he pays EUR 50 per month (KPN PS Bel+SMS+WebXL 350). The difference in bundles is also odd. KPN now has in addition to its standard PS Bel+SMS+Web plan the offer PS Bel+SMS+webXL. The number of minutes in the WebXL bundle is the same as the Web plan, but for EUR 2.50 per month the customer gets considerably more data, with another 150MB already from the lowest bundle.
This is also an uncertainty in the new tariff structure: customers either get a lot of everything, or everything in little amounts. The transition from Bel+SMS to Bel+SMS+Web is a big step, especially for the data component, while the switch from Bel+SMS+Web to Bel+SMS+WebXL is hardly mentionable. And the fact that with the new subscriptions, which KPN says are entirely centred around mobile data, voice and SMS are linked to mobile internet, the whole picture is muddied: the customer now not only has to pay attention to his use of voice minutes and SMS, but also the amount of data consumed. This is a direct line to the current trend where mobile users are dropping traditional services such as voice and SMS. Choice is good, but overkill is dangerous.
KPN now offers nearly the same minutes/SMS as Vodafone but at a higher price, while T-Mobile in general has lower prices with slightly different bundle sizes. With the cut in MBs, the value-for-money proposition is worse enough that a customer who doesn’t call much but wants mobile data is better off with the competition. Also KPN’s announcement that customers will pay more for smartphones means consumers will not be better off after 5 September.
KPN customers still have the right to change to a higher or lower plan after three months, but then from 5 September they will also see their data allowances cut.
Hi’s changes are largely in line with KPN. KPN already had an all-inclusive bundle, while Hi offered separate subscriptions and data plans (mostly sold together still). At Hi, the amount of SMS in the bundle will be double the number of voice minutes. Where KPN offers WebXL, Hi offers the Hi Messaging bundles. These have more MBs and a faster internet speed and also come standard with 3,000 SMS per month. This is new and will be attractive for young people who text a lot. However these plans start at EUR 37.50 per month, for 120 minutes and 400MB of data.
Nothing will change for roaming, KPN says. With KPN Personal Sim one of the USPs is that roaming use always comes out of the bundle value (at the standard roaming tariffs).
Depending on how much extra KPN charges customers for new smartphones (the company says a few dozen euros) and also if the competition responds with similar pricing, KPN has now positioned itself as the most expensive in the market. If the competition follows with the same strategy, consumers may go looking for alternatives such as Wi-Fi, which is already growing in popularity. For example in Japan, Wi-Fi provider Fon has an agreement with Japanese operator Softbank to use Wi-Fi routers with Apple’s iPhone.
Vodafone said it’s working behind the scenes on new models, but declined to say if it will follow KPN’s lead. Vodafone may focus on dropping the ban on VoIP, SMS over IP and tethering in order to meet the new legal requirements. Vodafone as well as T-Mobile (which did not want to comment on KPN’s plans) would both do themselves good by monitoring the blogs and forums in the coming period, as there is already a raging discussion over KPN’s new path in September – and these aren’t all very positive comments. This also likely is the result of KPN’s recent difficulties in communicating its plans to the market.
