From the customer perspective there needs to be an advantage to paying by usage. The reason PAYG phone plans exist is to appeal to those who don't need or want

From the customer perspective there needs to be an advantage to paying by usage. The reason PAYG phone plans exist is to appeal to those who don't need or want everything a monthly contract provides, particularly for budget conscious users. Contracts/bundles/etc appear to charge less because they bundle together things on the assumption that consumption will follow a predictable distribution, however they are actually a mechanism for raising average selling price by giving people more than they need/want/use and charging them more for it. They build in a margin on top of the average, or somewhere above it on that curve. This means the average user is likely paying more than for their share of usage. Sure, from the company's perspective they have to keep the resources around, but that's a scaling and cost-base issue for the company, not the concern of the user, and if the company scales well it shouldn't be much of an issue. Ultimately with this service, the competition is $5/m for effectively unlimited usage. If this service costs the average user $10/m, then only a small fraction at the bottom end of the usage distribution are going to make a saving, and find it a compelling offering, all things being equal in terms of product quality etc. This doesn't apply to everything of course, different industries, product categories, etc, are priced in different ways and have different customer expectations, but it's common and I think it applies here.