Korean challenger pushes LTE market to competing flavours of unlimited
The synchronised announcements came in the wake of a regulatory knuckle-rap for all three operators for their over-enthusiastic use of phone subsidies as a means to price-compete and offer apparent discounts. That has more or less left unlimited data pricing as one of the only differentiating options left.
So the fact that they all stumped up new offers on the same day appears not to be the result of any collusion - quite the opposite. We’re talking cut-throat competition in Korea thanks to the relatively recent arrival of challenger network operator LG U+, which kicked off the proceedings by launching a service plan with unlimited voice calls, messaging and LTE data for €55 and €58 per month with the more expensive option adding in U+HDTV, U+Professional Baseball and a ticket-buying service.
As everyone knows, unlimited never means unlimited. It means a consumption rate any sane person in possession of a smartphone or tablet might achieve over a day or month. The ‘sane’ definition obviously changes over time, though, just to complicate things.
That said, the aim of the unlimited offer is usually to create an allowance high enough so as not to constrain personal usage, but low enough to stop commercial hijacking (such as the tacking up two LTE devices to form a permanent circuit) and weird ‘teen shuttered in a bedroom and downloading films 24 hours a day’ behaviour which can account for a huge proportion of available LTE capacity if not jumped on.
The tricky part is to engineer a user agreement that keeps the nefarious use to a minimum while not pee’ing off the legitimate customers by imposing complicated terms and conditions or hard stops on service if usage goes too high.
LG U+’s solution is to throttle users to 3Mbit/s if the daily usage has exceeded 2 gigabytes, explaining that users could still stream video happily at that rate.
Being in a relatively small and highly competitive market, LG U+’s two main competitiors managed to strike back on the same day with counter-offers they had clearly prepared earlier (as they say in cooking programmes)
SK Telecom introduced three unlimited LTE data plans. Existing subscribers of its unlimited offer move onto the new plans automatically which feature thresholds of 8, 12 and 16 Gbytes (depending on plan), and costing €42.38, €45 and €52.60 respectively. Users who exceed the limit within the month are then put on 2 Gbytes per day at LTE speed and usage exceeding this will be throttled down to an ‘optimal speed’ for the network.
KT, meanwhile, appeared to have been caught on the hop and was accused by the LG U+ vice chairman of making its offer up on the spot, according to the Korea Joongang Daily. It announced that it would immediately offer unlimited LTE, calling and messaging for €48.
From day one of the new ‘unlimited LTE’ competition in Korea, it may just be possible to see the germs of the next competitive difficulty as the companies refine and differentiate their offers by fiddling about with the unlimited terms and conditions and therefore fall into the danger of confusing users.
But according to Antonios Drossos of consultancy Rewheel, the moves in Korea are significant in that they edge users towards properly ‘unlimited’ for all practical purposes, although users might attenuate their usage if and when they hit the various thresholds and are slowed down.