3G network pricing: welcome to 1993!

It was in the spring of 1993 that I first got online with my own modem. Until then, I’d relied on the terminals and workstations at uni for my email fix. But my last year was over, I was moving to Edinburgh, and there were several weeks to go before our wedding and the subsequent end to two years of a trans-atlantic romance. Phone calls to the US were still expensive in those days, so Compuserve it was.

At the time, Compuserve used a differential pricing structure based on the speed at which you connected to their servers. The faster your modem, the more you paid per hour of connection time. Effectively, they were charging you for the data you transferred, much like the 3G networks are doing right now. Let’s compare them, shall we?

In 1993, I was using a 2400bps modem, and I think that Compuserve charged me somewhere in the region of £3 per hour in addition to my monthly subscription charge. 2400bps is 0.4Kb/s. Assuming a maxed-out, steady connection, you could download a megabyte in an hour. £3 per MB, then.

I called in to my local Vodafone shop this afternoon, and got them to clear up some questions I had about my new Nokia 6680. One of these was, now that I’ve got this fancy new internet-capable phone, how much do I pay for data transfers? The answer: £2.35 per megabyte, including VAT.

Technology moves on; the cost of being an early adopter doesn’t.

Because of inflation, a pound is worth less now than it was back then, but the amount of relevant data you can get with that pound is also less. In 1993, the data you got over the internet was text, and a megabyte is a hell of a lot of text. In 2005, we have photo-filled web pages, streaming radio, podcasts, and movie trailers to download. A megabyte does not go a long way. Consider a single visit to the BBC News home page. At about 100KB, that’s 23p straight into Vodafone’s coffers. Ka-ching!

Sure, there are sites that will serve you up content specially downsized for mobile use, but the networks are pushing all of the bells and whistles pretty heavily. And with the 3G networks being almost as fast as broadband, it’s easy to fall into the trap of thinking you can use the mobile internet in the same way as you can at your desktop. All I can say is: you’d better have deep pockets. (How the hell do they expect anyone to actually watch a whole movie on their phone at those prices?)

Here’s one final comparison: our web hosting package costs about £10 a month, and with that we get 20GB of bandwidth. That’s about 0.05p per megabyte. The cost of downloading data over the 3G network is thus almost 5000 times as expensive as serving it up.