Optus' move is not unexpected, and follows Telstra's announcement in June last year that it was restricting data downloads on its revised Freedom Plan, with additional downloading attracting a fee per megabyte.
An Optus spokesperson explained the telco's new plans offered lower entry-level pricing which she claimed would encourage broadband growth in Australia.
"Also, from a business perspective, we can no longer afford to subsidise the high cost of bandwidth that some customers are using--so we have had to move to a new model," the spokesperson said.
Given this, the question is not why Optus is changing its plans, but why it took so long to follow Telstra's lead in moving away from cap-free downloads without penalties.
However, Optus has chosen not to go the penalty-charge route which Telstra opted for. Rather, once customers have reached their download limit for the month, their service would be slowed down to the speed of a dial-up service, according to the spokesperson.
"We've done a lot of research into what our customers are after--most didn't look favourably on financial penalties," she said.
Telecommunications analyst Paul Budde sees the change as positive one, because of the potential to attract more customers to broadband services. Budde estimates that about 75 to 80 percent of current broadband users stay within the 500MB level, and the next 20 percent would be happy with 3GB. He believes less than five percent of customers are using more than 3GB per month.
Budde said he understood that there would be a -strong vocal minority" of people who downloaded greater volumes and would be frustrated by the changes.
-Beyond 2005 we do need more competitive prices, but competition and technology will push that off," Budde said. -In the meantime my worry is [that] affordability is key to success."
Currently OptusNet Cable offers only one plan which means that customers who use little data pay the same amount as those who use a lot, according to information on Optus' Web site.
The Optus spokesperson said that from July 1 it would be offering four plans at different price points.
These include a 550MB plan costing from AU$54.95 per month; 3GB from AU$69.95 per month; 5GB from AU$134.95 per month; and up to 10G of data usage from AU$265.95 per month.
According to the spokesperson, the majority of Optus' customers download about 2.2GB of data each month.
She said customers who were currently under contract with OptusNet Cable would stay on that contract until it had expired.
Is Paul Budde stupid!? How can the changes provide a lower cost entry point when people were paying the same price and getting more before?