giffgaff: unlimited data packages aren't sustainable

A few weeks ago, we reported that T-Mobile UK was preparing to launch a range of new tariffs, known as ‘The Full Monty’ plans, offering unlimited text messages, unlimited calls to any UK network, and completely unlimited data for a flat monthly fee. As mobile operators have increasingly gravitated towards abandoning unlimited plans, in favour of clearly defined allowances, T-Mobile’s offering bucked the trend, by offering a service with no limits, no fair usage policies, no restrictions on consumption, while customers are also free to tether their tablets and notebooks at no extra charge.

T-Mobile isn't the only one that provides truly unlimited data to its customers. The giffgaff network, a SIM-only virtual operator that’s part of the Telefónica O2 empire, has been offering the same unlimited data bundle to its customers for some time, which has seen it rise in popularity since its launch in late 2009.

Unfortunately, it remains to be seen how much longer these packages can be sustained, as the company’s CEO has indicated that the end may be nigh for its unlimited web offering. Speaking with TechRadar, giffgaff chief executive Mike Fairman explained that as mobile data usage increases – with a growing number of users enjoying multimedia on the move, especially - it's becoming harder to balance user demand with the need to turn a profit.

Like other carriers, giffgaff must also face the strain of disproportionate usage by some customers – in recent weeks, the operator revealed that just 1% of its customers are eating over 40% of the entire network’s bandwidth – but even those who use the network responsibly are contributing to the problem. Fairman explained: “We are seeing an increase in the average usage, and that’s raising in our mind some thoughts [about] how sustainable it is to continue to have unlimited [data].”

giffgaff uses the O2 network, and keeps its prices low by avoiding handset sales, and devolving most of its customer service and support requirements to the user community, who are credited for assisting other customers through a reward scheme. Users currently enjoy inclusive unlimited data on all packages (or ‘goodybags’, which the customer purchases once a month) costing £10 GBP ($15.50 USD / €12 EUR) per month or more.

Fairman didn’t elaborate on plans to suspend the network’s unlimited web bundles, but stated that the company is consulting with its customers on the issue.

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