KPN to Increase Its Data Bundles and Tariffs

KPN to Increase Its Data Bundles and Tariffs

As of 1 June Dutch operator KPN will adjust its mobile plans to have larger amounts of data and higher tariffs. All KPN customers will be able to use their allowances within the EU from the first of June 2017, just like at home, with no extra charges. When a bundle limit is exceeded, the customer can choose to buy an add-on or have their network speed reduced.

The basic plan (Instap), with 150 minutes and SMS for €13.50 (US $14.71), will remain unchanged except that its validity will be extended to the EU. The Zorgeloos Instap plan will allow for 2 GB of data usage instead of 1 GB, with the price increasing from €25.00 (US $27.25) to €26.00 (US $28.34). Zorgeloos Standaard will provide 10 GB instead of 5 GB, with the price going up from €28.00 (US $30.52) to €31.00 (US $33.79) per month. Zorgeloos Premium increases from 10 GB to 25 GB, while the price remains the same at €38.00 (US $41.42) per month. The plan including 20 GB will go up to 50 GB, while the price remains at €99.00 (US $107.91). Customers with KPN Compleet will have their bundles doubled.

The €5.00 (US $5.45) fee for expanding one’s plan to the EU will automatically be canceled, and Spotify is no longer part of the new plans. Calling outside the bundle will cost €0.23 (US$ 0.25) per minute and €0.07 (US $0.07) per SMS.

Tarifica’s Take

In the drive to attract customers away from competitors and boost data consumption habits, operators in developed markets have been giving data away. Unlimited-data plans and radical increases in data allotments in limited plans without price increase have become increasingly prevalent.

However, this set of plan changes from KPN could be an indicator of a turning of the tide. The operator is increasing data allowances in its slate of offerings by a factor or two or more, clearly in response to the general trend toward heavier data use (driven, as we have shown, by streaming entertainment content among other applications). However, it is also increasing prices.

This we interpret to mean that since it is no longer necessary, in the Dutch market, to give data away, that the market has matured in terms of data consumption. If a large appetite for data has become ingrained in a large proportion of the consumer base, operators can now charge more money for that data instead of keeping it less expensive in order to incentivize consumption. In short, this state of affairs indicates that the goals of the great data giveaway have been achieved and the operator can now begin to recoup its investment.

Interestingly, this trend, in the case of KPN, appears to apply to the mid-range of the slate. The prices of the basic (Instap) plan and the two premium plans are not being increased, even though the data allotments are. While we cannot be sure of the exact strategy at work here, it may be that for the lower-end customers, some incentivization is still required, while at the high end, the price of the plan was already high enough to generate satisfactory revenue in proportion to the data use.

The end of the operator’s arrangement with Spotify makes sense in light of the trends outlined above. If customers have already become used to using a lot of data to stream music, the operator may no longer feel that it has to provide any special deal on a streaming service in order to get those customers to increase their data spend. As for the extension of plan validity to the EU instead of the Netherlands only, that is of course in line with the EC-mandated end to roaming surcharges set for this June.

As a cautionary note, we should point out that T-Mobile Netherlands has just announced that it has signed up 100,000 customers since January for its Go Unlimited plan, which offers unlimited data, calls and SMS for €35.00 (US $38.15) per month. Such an offering could possibly end up putting pressure on KPN to reconsider its move.