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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40 Comments

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They should have considered the fact of heavy users when they first thought up the idea of an "Unlimited" plan. You cant offer an unlimited plan and then penalize those who make the most of it by doing so your saying hey this really isn't an unlimited plan ie: Falsely Advertising it as such when knowingly not meaning it.... I smell a law suit coming

The real, hard cost of bandwidth is 1 cent per gigabyte and text messages use the FREE sms carrier channel.

Therefore the MVNO here is being grossly overcharged and therefore, so is every mobile cell user in the world.

It's a huge scam and the bandwidth caps are just another way to inflate profits to obscene levels.

Improve your infrastructure to mitigate the increase in demand. If you can't afford to, don't blame customers for making a full use of what you offer.

vanx said,
Improve your infrastructure to mitigate the increase in demand. If you can't afford to, don't blame customers for making a full use of what you offer.

They're an MVNO. They have no control over network infrastructure.

AFineFrenzy said,

They're an MVNO. They have no control over network infrastructure.

Doesn't matter. If they are choking, they should develop their own instead of piggybacking or get a bigger chunk from O2.

Well if people like Neowin didn't do articles like this people wouldn't know about the network therefore keeping data down. I wouldn't mind a 5 gb cap, seems high enough for mobile devices.

There are plenty of virtual carries in Australia which have a 5 GB cap, Red Bull mobile being one on the Vodafone network, and Woolworths mobile on the Optus OpenNetwork.
If you need more use a carrier which has datapacks, for example 12 GB from Telstra for about $60, which is really quite reasonable and much cheaper than a Bigpond USB stick.

50 GB is way too high without limiting access to the resource with an extremely high price. Just read up on tragedy of the commons. To ensure everyone has access the price needs to be regulated on a supply & demand situation. If you need more, then pay for more. If the network quality degrades then people are going to jump ship.

Back in 2010 Vodafone Australia lost over 375,000 customers in 6 months due to poor network performance while enforcing strict data allowances.
http://delimiter.com.au/2011/0...ontent-375k-customers-lost/

If you aren't happy with your current provider just walk.

Really they should add something that says if you use constantly more than x GB a month then you will have your connection limited, that way you don't punish all your customers for the action of a few.

I rarely download stuff on my Virgin broadband connection but when I do it annoys me to see my downloads go from 1.1Mb a second to 100k just because I downloaded 2GB+. It's a tease seeing Steam suggest I can play a game in 2 hrs which suddenly becomes 6 hours.

BE Broadband - truly unlimited . I've happily transferred 100GB in a month. I guess they might change that one day, but I presume they have to at least honour it until my contract is out.

I'd be willing to trade the unlimited deal for a cap of 1 or 2GB, with a way to top it up, and most importantly to be allowed to tether my phone to my laptop (I understand why it's banned with unlimited - since otherwise it will get used as home broadband or people will just draw colossal amounts of data down on their laptops anyway that they wouldn't on their phone).
It really annoys me that it is necessary to use a dongle or MiFi device to do this, when the limitation is an entirely artificial one - my iPhone could do it just fine.

Ah, one of these articles, where a bunch of commenters appear who, knowing absolutely nothing whatsoever about any single element of what makes a mobile network tick, brandish their derp faces and proclaim that anything short of cheap, unlimited mobile data can only be a result of evil corporate greed.

Here's just a small hint: profits pay for growth. You can't be a crybaby about carriers being slow to add coverage or deploy new tech while also being a crybaby who ignorantly thinks the industry should only make just enough money to pay its employees.

To be quite frank, the people who ramble on about wanting their mobile providers to give them everything they want at the price they want are the ones who sound greedy. I want the whole industry to change into nothing but dumb pipes, personally, but I'm not so retarded as to think I somehow deserve everything I want just because I have a wallet.

Joshie said,

Here's just a small hint: profits pay for growth.

ohh you.
profits pay for yachts, government subsidies pay for growth.

twist said,

ohh you.
profits pay for yachts, government subsidies pay for growth.

What's silly is how many people believe this as a universal rule of business.

Paychecks and stock options buy yachts. Profits != paychecks.

I think the average user will never ever approach say a 2GB/month cap. So offer a package at current pricing with a 2GB cap and allow for an add on for x amount per GB/month..

Simple and IMO perfectly acceptable.

paulheu said,
I think the average user will never ever approach say a 2GB/month cap. So offer a package at current pricing with a 2GB cap and allow for an add on for x amount per GB/month..

Simple and IMO perfectly acceptable.


When the average website is 600Kb-1Mb that is unacceptable especially when you factor in tethering and the odd streaming video on Youtube, not everyone has wired broadband, a lot of people rely on mobile internet,

TheLegendOfMart said,

When the average website is 600Kb-1Mb that is unacceptable especially when you factor in tethering and the odd streaming video on Youtube, not everyone has wired broadband, a lot of people rely on mobile internet,

Tethering isn't allowed on giffgaff plans. Only the designated data plans that allow it.

StealMySoda said,

Tethering isn't allowed on giffgaff plans. Only the designated data plans that allow it.

I didn't know this (was considering joining them, probably still will). How much is it to add tethering on - if possible at all?

TheLegendOfMart said,

a lot of people rely on mobile internet

These unlimited data plans from giffgaff are only for smartphone customers. There are separate plans for people using mobile internet for dongles/tablets/tethering. Hence, I agree with a cap of 2GB/month.

SuperHans said,

I didn't know this (was considering joining them, probably still will). How much is it to add tethering on - if possible at all?

Look on their website for "gigabags". It's £5 for 500MB, £7.50 for 1GB and £12.50 for 3GB.

StealMySoda said,

Tethering isn't allowed on giffgaff plans. Only the designated data plans that allow it.

Tethering is actually allowed. They have no policy against it. There are dedicated plans for mobile internet dongles and tablets, but you can still tether with the normal plans if you want. I do it quite regularly with my devices, and I even have a tablet of a normal phone plan rather than a tablet plan (though that's because the dedicated tablet plans don't let me send texts from my tablets...)

~Johnny said,

Tethering is actually allowed. They have no policy against it. There are dedicated plans for mobile internet dongles and tablets, but you can still tether with the normal plans if you want. I do it quite regularly with my devices, and I even have a tablet of a normal phone plan rather than a tablet plan (though that's because the dedicated tablet plans don't let me send texts from my tablets...)


No - it is against their T&Cs. Tethering when you don't have a gigabag and getting caught leads to your service being cut off.

Biohead said,

No - it is against their T&Cs. Tethering when you don't have a gigabag and getting caught leads to your service being cut off.

From what I've read, there's nothing in their T&C's that state tethering is not allowed. http://giffgaff.com/boiler-plate/terms. And nowhere on their site from what I've read is there anything telling you you can't use tethering on their normal phone plans.

Edited by ~Johnny, Feb 23 2012, 1:22pm :

TheLegendOfMart said,

When the average website is 600Kb-1Mb that is unacceptable especially when you factor in tethering and the odd streaming video on Youtube, not everyone has wired broadband, a lot of people rely on mobile internet,

We are discussing a mobile data connection here, not a replacement for a home broadband connection. There is separate add ons for that..

As we are talking average users here this 1MB website would be cached and you can view 2K websites on this alone (meaning about 66 sites/day) I think a cap of 2GB/month is more than adequate for the vast majority of users.

If you allow someone to go over say 2 months in a row and offer an extension after that seems to me there will be no one arguing that would be a bad way of dealing with this..

~Johnny said,
Tethering is actually allowed. They have no policy against it. ...you can still tether with the normal plans if you want.

Incorrect.

~Johnny said,

From what I've read, there's nothing in their T&C's that state tethering is not allowed. http://giffgaff.com/boiler-plate/terms.



5.14. In addition to our standard terms and conditions, all usage must be for your private, personal and non-commercial purposes. You may not use your SIM Card:
a) In or connected to any other device including modems, dongles or any other way to connect to a PC (unless you are on a gigabag plan);

Simply "googling" giffgaff and tethering will also provide the answer.
http://community.giffgaff.com/...rnet-Tethering/td-p/2269517

Richio said,
Just put a cap of around 50GB or something?

50GB would be a pointless cap; it should be 5GB/month to affect the 1% of excessive users. Even then, I reckon that's still quite high considering the (currently) unlimited data plans are only for smartphone use (tethering plans are separate). O2 claims 97% of its own smartphone customers only use less than 500MB/month, and so even 2GB/month would be a reasonable limit for giffgaff to implement.

To concur with rippleman and smithy_dll above - dingo's kidneys. I honestly blame reckless drive to sell. We use that data because we can, because we have fast and bottomless phones and tablets that can eat it all. We have been given a "connect anywhere" promise and we want to exercise it.
Telcos' advertising departments have f*cked up our minds so much that now we need to have obvious things explained to us - that, apparently suddenly, there's no such thing as "unlimited". Never has been and never will.
The f*ckers are now backtracking from their own advertising - having dropped prices and promised heavenly things while there weren't enough people capable of holding them onto it and, finally, having run into a bad bargain.

You only have to had used the Vodafone network in Australia between 2008 and 2011 that contention is a real issue. Cheap network + lots of users = slow or almost unusable network in many locations. I mean has anyone gone to a festival and had their phone able to place a phone call?

RedFlow said,
I honestly blame the 1%...

They always use this excuse, but why don't they just punish that 1% instead of everyone. Just charge them more. I don't mind caps either, IF the caps are reasonable. These plans that are $15 for 150MB and crap like that are ridiculous. When my contract runs out, I'm getting cheap phone with Verizon for coverage and Republic Wireless for everything else.

farmeunit said,

They always use this excuse, but why don't they just punish that 1% instead of everyone. Just charge them more. I don't mind caps either, IF the caps are reasonable. These plans that are $15 for 150MB and crap like that are ridiculous. When my contract runs out, I'm getting cheap phone with Verizon for coverage and Republic Wireless for everything else.

As far as I know that's what GiffGaff are doing, I use giffgaff and they're honestly the best provider to use in the UK, truly unlimited internet, unlimited texts and 250 mins for £10. Their slogan is "the mobile network run by you" and they gave people the chance to vote on what they wanted to happen about this, with most agreeing that limiting the 1% would be the best option. The only other exception they have to their unlimited policy is that you don't use your phone for tethering which is more than fair.

And to people that where worrying about being put in that 1% they said that it was only people who where using the network to download lots of TV shows, movies, music that should be worried, and that in my opinion is definitely abusing the network.

Personally I just love being always connected and knowing that if I ever need access I will always have it without having a "data allowance reached" message when I need it most.

RedFlow said,
I honestly blame the 1%...

Oh I thought we were talking about Occupy Wall Street again. But in this case, it's the 1% doing the occupying.

KyleGM said,

As far as I know that's what GiffGaff are doing, I use giffgaff and they're honestly the best provider to use in the UK, truly unlimited internet, unlimited texts and 250 mins for £10. Their slogan is "the mobile network run by you" and they gave people the chance to vote on what they wanted to happen about this, with most agreeing that limiting the 1% would be the best option. The only other exception they have to their unlimited policy is that you don't use your phone for tethering which is more than fair.

And to people that where worrying about being put in that 1% they said that it was only people who where using the network to download lots of TV shows, movies, music that should be worried, and that in my opinion is definitely abusing the network.

Personally I just love being always connected and knowing that if I ever need access I will always have it without having a "data allowance reached" message when I need it most.

Agreed, I'm on giffgaff and it saves me a lot of money. I use the £10 one but only use ~250mb a month, I don't see how people can use much more than that, unless they just have a ton of free time to watch tv and the like.

I don't know the books of said companies, i would say its quite accurate. Look at it from this angle. Business are ALWAYS on the look out to give them an edge against their competitors, so what would be best thing to offer? What customers cry for ofcoure. EVERYONE wants unlimited data but EVERY company has moved or is moving from unlimted to ulimited with restrictions. What this tells me is its TRULY just not viable.

still1 said,
I call that Greed!!! they call it unsustainable

There is only so much electromagnetic spectrum.
Why not have speed shaping like on Bigpond? Clearly defined limits with no risk to the end user. Those who need more pay for more. No different to people who want to eat more have to buy more food. Mobile data is no more unlimited than our food supply is.

You say release more spectrum, build more towers with small cells, but within what kind of time frame?

rippleman said,
I don't know the books of said companies, i would say its quite accurate. Look at it from this angle. Business are ALWAYS on the look out to give them an edge against their competitors, so what would be best thing to offer? What customers cry for ofcoure. EVERYONE wants unlimited data but EVERY company has moved or is moving from unlimted to ulimited with restrictions. What this tells me is its TRULY just not viable.

I agree with still1. I say its definitely viable, just not as profitable as charging ridiculous fees for using data in excess of some ridiculously small cap. That my friend is a clear example of GREED.

SharpGreen said,

I agree with still1. I say its definitely viable, just not as profitable as charging ridiculous fees for using data in excess of some ridiculously small cap. That my friend is a clear example of GREED.


They're a company, the only rule of a company is to make a profit, and the largest one possible at that... Why'd the want to give you something that makes them less money than their competitors. Good business skills = **** 'what people think of company' skills.

still1 said,
I call that Greed!!! they call it unsustainable

They're charging only £10 a month for *truly* unlimited data & texts, without a contract, and they allow tethering with that too. They were never making massive profits in the first place - and consider there are £30-£40 monthly contracts out there that don't offer the same. People gobble up that kind of deal like crazy, and realistically that isn't sustainable if you actually want to not make yourself broke.

Edited by ~Johnny, Feb 23 2012, 12:23pm :