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Your unlimited plan is not unlimited.

By Tan Zhi Xin

Circles.Life, Singapore’s first all-digital network operator, is determined to shake up the telco scene. It does not have the deep pockets the three major telcos have, neither does it own telecommunication infrastructure. But it has nimbleness.

The new entrant targets Internet savvy users in Singapore by offering flexible contract-free mobile plan with unlimited bonus data reward program. The main draw is the free unlimited Whatsapp feature. There is a catch. Its unlimited feature is not literally unlimited.

The unlimited feature is not unlimited

Circles.Life user, Winston Ong ranted over social media about how the telco charged him for overusing his supposedly unlimited Whatsapp data. Ong was penalised for exceeding a limit that nobody knows.

The free unlimited Whatsapp feature entitled to users who signed up with Circles.Life is a marketing stunt aimed at attracting customers. The mobile plan supposedly allows users to “send unlimited, free of charge, text messages, video clips and photos via WhatsApp” when in reality, it has a ceiling cap.

In fact, Circles.Life did warn its users of potential charges. Those who bothered going through the 8000-words long terms and conditions would realise that the feature is subject to Circles.Life’s Fair Usage Policy (FUP). The terms and conditions states explicitly, “In the event you consume more than 1 GB of data on WhatsApp, you may be charged for the data usage above 1 GB at a rate of US$6 per GB.” Circles.Life also reserves the right to “modify the scope of WhatsApp features covered by Unlimited WhatsApp Plus anytime without prior notice to the user.”

Another limit most users do not know of is that video calls are not covered under the free unlimited data offering. Again, if one paid more attention while signing up or bothered to read the terms and conditions, he would have realised that the plan does not include free video calling.

In this sense, Circles.Life did not violate any agreement or break their promise. It might not have been ethical in their advertisement about free unlimited data, but who can the consumers blame when they made the conscious decision to check the “I agree” box under the terms and conditions without even reading it?

There was a golden age in the telco scene not too long ago

Not too long ago, users in Singapore were still experiencing the golden age of the telco scene. Two of the major carriers, Starhub and M1, offered unlimited data to subscribers. Singtel on the other hand, offered 12 GB mobile data plan. It was a period of time when smartphone users could watch their favourite videos and play mobile games to their hearts’ content.

The carriers soon realised the unsustainability of offering such data plan. M1 was the first to do away their unlimited data plan in 2011, followed by Singtel, which slashed its data cap from 12 GB to 2 GB in July 2012. Starhub was the last to stop offering unlimited data. By 2013, none of the major carriers offered data plan exceeding 3 GB.

It was clear that the golden age was over. What came afterwards was public outrage, which was understandable in a country with mobile penetration rate consistently exceeding 100%.

Mobile penetration rate (%)

“That (offering unlimited data) is a very costly way of selling spectrum,” says Canalys’ principal analyst Daryl Chiam. Chiam added that most users do not download more than 5 GB worth of data per month.

“Service providers often guess wrong and find themselves losing money either because they underestimated average usage or because a small number of people abuse the system and use way more than the provider anticipated,” says telecommunications industry analyst Jan Dawson.

Indeed, another key reason why major carriers moved towards tiered plans was network congestion. It was estimated that roughly 2% of the heavy users congested the network for the remaining 98%. Singtel also revealed that 11% of its 3G subscribers accounted for 60% of the data traffic. Mobile network resources are limited. High traffic means congestion, which then translates into slower speed. The inability to deal with network congestion is an economically sustainable way resulted in the decision to do away with it entirely.

Throttling remains the main issue in countries offering unlimited data

Mobile plans offering unlimited data usage are emerging elsewhere in Asia. But there are many limitations to these unlimited plans, with throttling being the main issue. While there is no limit on the amount of data a user can use in any given billing period, there is a limit on the amount of full-speed data he can enjoy. That means data speed may slow down significantly if a user exceeds a certain threshold. This is referred to as “throttling”. Throttling is almost always purposeful to discourage users from hogging the network.

China’s Unicom recently launched the “ice cream” data plan offering unlimited data usage and calling. The plan comes in two versions – one for 198yuan ($28.65) per month for unlimited data usage with 1500 minutes of free calling; and the second for 398 yuan per month for unlimited data usage and calling. However, the 398 yuan plan only offers up to 40 GB worth of data at 4G speed. Afterwhich, the speed is reduced to 3G. There is also a daily limit of 2 GB of data at 4G.

Digital mobile service provider, Webe, offers Malaysia’s first unlimited mobile Internet and voice plans that also come with unlimited SMS and calls. The price tag stands reasonably at RM79 (US$18.40), after discount. Webe also throttles users from leeching off network. Network speed is expected to improve in 2017, but for now, speed continues to be the main drawback.

Similarly, Indonesian telco, Indosat IM3, offers a limited unlimited Internet plan at Rp50,000 (USD$3.80) with 500MB FUP at a maximum speed of 185 Mbps. That means, once user exceeds 500MB data limit, the speed will be reduced to 16 Kbps (or around 1% of the initial speed). This also means you can no longer stream a YouTube video properly.

Perhaps we do not really need unlimited mobile plan

1 GB of data provides up to five hours of streaming live TV, 17 hours of Internet browsing, eight hours of video streaming on YouTube (SD), 341 tracks on Spotify, or 14 hours of Skype video chat. Perhaps we need more than 1 GB but is there a need for unlimited data? Are we paying for unlimited data or the sense of security knowing that we will not have to pay additional fees?

Either way, offering unlimited data to everybody is impossible on a technical level. This is not just an issue Asia faces, but also a common problem major carries in the United States are struggling with. Currently, telecommunication infrastructures everywhere in the world are simply not sufficiently advanced to feed our insatiable hunger for data. Throttling is the only solution to appease the major crowd.

The bottom line is that users who want unlimited mobile data have to accept throttling as part of the package. At the end of the day, the majority should not be sanctioned because of a bunch a selfish minority.