Vodafone Questioned For Making It Easier To Get 3G
By Mike Masnick, Fri Jul 16 20:00:00 GMT 2004

Vodafone is getting hammered by the press for basically giving away their 3G data card, but isn't it good news that they're lowering the hurdles for new subscribers to sign up?

Mobile phone operators don't have the best reputation for encouraging people to adopt their latest and greatest technologies. The strategy tends to be fairly consistent with most operators: when you first launch something, price it ridiculously high and mutter something about how it's really targeted at "business users" who have expense accounts and CFOs who don't pay close attention.

The end result, of course, is that a few early adopters sign up, but it becomes very difficult to "cross that chasm" as most other potential users don't see the benefit, and don't want to take out a second mortgage to experience the promised benefits for themselves. The operators always insist that "if people just tried the new service, they would see the benefits." However, with the entry fee so high, they waste a lot of time convincing people to just trust them that there really are benefits in there somewhere.

It appears, however, that Vodafone may have understood this dilemma with its 3G offering in Europe. While the press is hammering Vodafone for dropping the price of its 3G data card to one Euro, this seems like a straightforward marketing move to actually encourage adoption. The Reuters report wastes a lot of space wondering if this is a sign that Vodafone is struggling with 3G, and frets that other operators may have to do the same thing.

By dropping the price to a single Euro, Vodafone has effectively knocked out the initial hurdle for subscribers. Vodafone doesn't make its money from selling wireless data cards. It makes it from selling service, and it's going to sell a lot more service by giving away the data cards. It looks like someone within Vodafone did a quick calculation and realized that the value of having many more users paying monthly data subscription fees far outweighed the cost of giving away all these data cards. It doesn't look like a desperation play at all. Instead, it looks like a smart move to encourage more widespread adoption of a valuable new service, knowing that increased revenue from subscription fees will pay back the promotional costs of giving away all those data cards.