In Business Model, Internet Access, Mobile

The 5G launch by Vodafone UK contains at least a couple of novel developments. For starters, Vodafone’s 5G will come in speed tiers. Vodafone Unlimited Max features unlimited mobile data usage at speeds as fast as the device and the network will allow. 

Vodafone Unlimited offers speeds of up to 10 Mbps. Vodafone Unlimited Lite supports speeds up to 2 Mbps.

For customers accustomed to buying their data usage as a variable cost, the new Vodafone approach shifts offer differentiation to speed, much as fixed network offers do. Pricing is differentiated by maximum downstream speed, not usage buckets. That makes the retail offers more analogous to fixed network service plans, which tend to be differentiated by speed. 

It remains to be seen whether that sort of difference will be easier for consumers to grasp, and might lead to higher take rates for the more-expensive plans. If I had to bet right now, I’d guess it will be easier to make plan differences clear when the tiers are speed-denominated, not usage based.

The other development is that usage is unlimited for all plans, removing the usage allowance as the key difference between plans. 

Vodafone has not specifically said how it is creating the tiers, but network slicing network slicing is one conceivable approach, where customers are different plans essentially use different network slices, some of us would guess. 

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