The launch of Apple’s iPhone 4 last week also signalled the end of unlimited smartphone data plans from the UK’s top mobile phone companies.

Until now, many smartphone subscribers have enjoyed the freedom of browsing the internet for as long as they liked for a fixed monthly fee. It is clear that this is all set to change.

When unlimited data usage contracts first became available, they were designed for a far less data-hungry audience. Now, they are simply inadequate to cover the rising costs of data consumption rates.

Similarly, smartphones have proved more popular and powerful than anyone ever imagined. Coupled with a surge in the amount of data being consumed, the pressure has mounted and it now needs to be dealt with.

Mobile operator O2 recently revealed that data traffic on its network is doubling every four months. They also brought to light the fact that nearly a third of its data traffic is accounted for by just 0.1% of its customer base.

It seems that whilst data consumption rates continue to rocket, the revenue created for the networks in the UK is flat, creating a vicious circle. Ultra heavy users are costing mobile phone companies dearly and it is no longer economic to support the amount of bandwidth they are using at such cheap rates.

To address the problem, O2 have introduced a monthly cap of up to 1GB for data on new contracts. Alongside O2, Vodafone and Three are also announcing new monthly data caps on their own contracts with extra charges for those customers who continually use over 500MB a month.

This shift also coincides with the EU legislation that came into force yesterday. The directive stipulates that it is now compulsory for Service Providers to place a limitation cap of 50 Euros (ex VAT) per mobile phone for data usage whilst in the European Union unless a customer has specified otherwise. A number that reaches this limit will be barred for data use until the user has returned to the UK.

Whilst there is a small minority of heavy data users that need to be monitored, it is also important to note that the vast majority of customers are staying well below the level of the data caps that are imposed. The onus is now on the network operators to make sure they have processes in place to regularly update users who are approaching the limit of their data bundle.

Whilst this issue continues, one thing that is certain is that the demand for data consumption is only likely to increase over time.

In the future, it is predicted that many network operators will have to analyse and invest a lot of time and money in new technologies to ensure that they are able to cope with the demand from their customers.

This entry was posted on Friday, July 2nd, 2010 at 10:00 am and is filed under Business Mobiles, Business Telecommunications, Telecommunications News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.