Vodafone’s disappearing 5G premium

Vodafone says it is: “…delaying the expected $10 monthly add-on charge for 5G through to July 2021.”

It’s a safe bet that no-one will ever get to pay a surcharge for using the company’s new mobile network. Let's stop pretending otherwise.

When the network launched, Vodafone said it would charge customers a 5G premium of $10 a month to use the service. It then said it would waive the charge for the first six months.

Deja Vodafone

That period is now extended to 18 months. By then, the company’s 5G network will face the same competitive pressure that has pushed down mobile call charges.

We’ve been here before. Vodafone attempted to charge customers more for 4G when that network was first introduced.

At that time there was a noticeable difference in data performance between the 3G and 4G networks.

Killer app?

While there is a huge speed boost for 5G mobile users, there are no everyday applications that make use of this¹.

High resolution streaming video works fine on 4G most of the time. Mobile users upgrading to 5G won’t notice a thing. In other words, Vodafone would be asking consumers to pay more for bragging rights only.

It doesn’t help that 5G coverage remains patchy. Yes you can connected at 100s of megabits per second on parts of Lambton Quay, but walk 100 metres and you’re back on 4G. At the same time, only a handful of somewhat dreary phones are capable of using 5G at the moment.

It’s understandable that Vodafone wants to recover the hundreds of millions of dollars that it will have invested in building a 5G network.

5G premium is on the nose

Yet asking mobile users for more is on the nose. Apart from those customers see no noticeable performance benefits, one of the main reason carriers want 5G is that it is more efficient to operate. It lowers the cost per customer and the cost per gigabyte of delivered data.

With 5G carriers can support more customers, add new services and, ultimately, make more profit. Yes, it is a good thing, but is hardly a compelling sales pitch to put to consumers and certainly not a reason to get them to dig deeper into their pockets.

The irony here is that Vodafone simultaneously upgraded its 4G network. Customers using that will notice improved performance.

1. There may be enterprise applications for 5G by then, but those users rarely pay their own phone bills. ↩︎