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iPhone plans for business

Richard Chirgwin

If you want a data-capable phone for business, with better browsing and e-mail than most phones, along with competitive data rates, then you could do worse than consider the iPhone.

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Download the complete spreadsheet here!

Most of the press the iPhone is getting follows a strictly consumer angle – the queues at the Apple stores, whether consumers are likely to find themselves overspending on data plans once they get a fast, easy mobile browsing device, and so on.

Attention on the iPhone from the point of view of the business user has been minimal, however. This is strange, because fast, easy browsing and a good e-mail client are just as important as business tools as they are as consumer gadgets.

To look at how iPhone plans stand as business devices is challenging. This article is based on an analysis of the permutations of more than 250 3G phone plans from Telstra, Optus, Vodafone and Three (Virgin, as a subsidiary of Optus, was included in the study), taking into account various data allowances, excess download rates, phone plan monthly fees and data plan monthly fees.

To ensure as thorough a comparison as possible, consumer plans are included, on the assumption that if a consumer plan is more attractive than a business plan, then SMEs (in particular) will probably opt for the consumer plan.

It's also important to note that some assumptions had to be made in putting this article together. These are:

  • Only 3G phone plans were considered – in particular, modem-only 3G plans were not included in this study. While these are an important part of the 3G market, it is inappropriate to compare modem plans to phone plans.
  • Extremely heavy users are excluded – Telstra offers business 3G data plans to 10 GB per month and beyond. However, users generating such heavy activity are likely to subscribe to modem data plans rather than 3G phones.

Once the plans were downloaded and captured in to a spreadsheet (all of which took place between August 1st and August 3rd 2008), the following analysis was made for this article:

  • Raw cost at different download levels – the plan price for data usage at 200 MB, 500 MB, 1 GB and 3 GB was calculated, irrespective of the plan's data allowance. While a user on a 100 MB plan is unlikely to download 3 GB, it's instructive to see how high the price can reach for the careless.
  • Cost for “appropriate plans” – the cost was calculated assuming that the user's download was never higher than double the plan allowance. While a user on a 100 MB plan might not download 3 GB, it's perfectly likely that the user might download 200 MB.
  • Cost within plan allowance – the cost was calculated assuming that the user remained within the plan allowance.

Outright device purchase price was not included in this study, however where plans include a monthly repayment for the device, this was included.

Other exclusions should be noted. This article does not compare the iPhone to Blackberry plans, and I have excluded the cost of up-front device purchase. Likewise, because of the extreme complexity associated with the phone / SMS bundles, these are not included in this article.

Data Plans: Handle with Care

The most important finding in this study is that all users, whether business or consumer, should take care when choosing a data plan, because the penalty for under-estimating your data consumption is severe.

Excess prices in the study sample ranged from 10 cents per megabyte (Three's 3G plans) to 15 cents per kilobyte (Virgin and Vodafone). Three, Optus and Vodafone all have some plans in which the excess is under 15 cents per megabyte, and the lowest excess offered to business iPhone custoners is 15 cents per megabyte, well above the consumer best-price of 10 cents per megabyte.

Business customers aren't particularly well cared-for in data excess. The average excess for all the business plans captured in this study was $3.27 per megabyte, compared to the study-wide average of $1.37 per megabyte and the consumer average of $2.61.

These download costs stack up. In the most extreme cases – a user with a very low allowance suddenly taking 3GB per month – the cost of data runs well into the tens of thousands. Even in a more moderate case, a user on a Virgin 300 MB plan at 15 cents per kilobyte excess will pay thousands if he or she downloaded 500 MB in a month.

There isn't much difference, however, between iPhone and ordinary 3G download prices within carriers, so download prices don't address the question of how suitable the iPhone is for business applications.

Data Allowances

Because of the high cost of excess data, data allowances are of vital importance – and differences in allowances make it difficult to compare plans. Within the study, Vodafone and Virgin had the simplest allowance schemes and Optus the most complex:

  • Vodafone – allowances include 100 MB, 250 MB, 500 MB and 1 GB for iPhone and non-iPhone plans.
  • Virgin – Virgin has the simplest offerings, either at 1 GB or 5 GB.
  • Three – Allowances range from 20 MB per month to 3 GB per month, with six variants in the tariff.
  • Telstra – Allowances range from 5 MB to 3 GB per month (higher allowances available but not include in this study).
  • Optus – There are 13 different allowances available, from 5 MB per month to 3 GB per month.

As with excess prices, businesses are also poorly served in download allowances. The plans obtained in this study only reach up as high as 1 GB per month, whereas consumer plans reach as high as the Virgin Mobile 5 GB offer. Telstra, Optus and Three all have 3 GB consumer offerings.

Spend

When it comes down to it, the business is even more acutely aware than the consumer about the cost of running mobiles, especially when the business is running lots of mobiles.

It's downloads and excess that make the difference – and the degree to which users do (or don't) overshoot their download limits. While some of the analysis produces unrealistic results (for example, if you choose the wrong plan and download 3 GB in a month, the worst-case outcome is over $40,000), a more modest user of business plans could still make disasterously bad choices. Because of the lack of high-usage business plans in the iPhone world, the lowest cost in business plans for the user downloading 3 GB in a month is more than $400 (unless, of course, the business user opted for a consumer plan and used the Virgin 5 GB offering).

And even a user of a 250 MB plan downloading 500 MB in a month could suffer a $3,800-plus slug!

Table 1 compares business iPhone plans to all consumer plans, business 3G plans, and consumer iPhone plans.

Table 1

Cost of Plans: Assuming User Remains Below Cap
200 MB per Month
500 MB per Month
1 GB per Month
3 GB per Month
Business iPhone Plans
Minimum
$56.00
$61.00
$149.00
N/A
 
Maximum
$212.00
$212.00
$212.00
N/A
Business 3G Plans (all 3G)
Minimum
$56.00
$61.00
$149.00
N/A
 
Maximum
$212.00
$212.00
$212.00
N/A
Consumer iPhone Plans
Minimum
$29.00
$39.00
$70.00
$100.00
 
Maximum
$469.00
$469.00
$469.00
$469.00
All 3G and iPhone Plans
Minimum
$29.00
$39.00
$49.00
$69.00
 
Maximum
$469.00
$469.00
$469.00
$469.00

The Verdict

With its reputation for good browsing usability and good e-mail, the iPhone could be a natural for the business user as well as the consumer.

However, the business plans available don't match those available for consumers. If a business is looking for an iPhone plan, it looks like the consumer plans are the best available.

If you are sure you can trust your users not to exceed their caps, the Virgin Mobile offering, at $100 per month with 5 GB included, is the best – but at 15 cents per kilobyte excess, you have to be certain that you'll never cop an excess.

If you're less certain, then at $129 for 3 GB, Optus is not much more expensive than Vodafone – but its 35 cents per megabyte excess is far lower.

The lowest risk, if you're most concerned that your users will overshoot their download limits, is with Telstra, where 3 GB can be had for $199 (using the lowest plan with the fewest included calls), but the excess is just 25 cents per megabyte.

But if data is what it's about, then perhaps the iPhone isn't a business tool anyway. The best price for 3 GB of data in the whole menu of plans analysed was from Three ($69 per month); and at 10 cents per megabyte, the Three plan is also relatively low-risk should your users overspend their data allowance.