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Tiers start flowing at O2 UK

O2 has switched off the unlimited data tap

The floodgates have opened, as UK carrier O2 becomes the latest operator to put an end to all you can eat data. New and upgrading smartphone users will be affected, making the move rather timely in light of the imminent launch of the iPhone 4.

O2 UK CEO Ronan Dunne, who famously apologised for the poor performance of the O2 network in the wake of the launch of the iPhone 3G, was on hand to point out that the vast majority of smartphone users will be unaffected, it’s the heavy consumers of data that will be hit hardest.

And more importantly for O2, the company can start spinning a profit from mobile data usage. Based on current usage patterns, 97 per cent of O2 customers would not need to buy additional data allowances, as the lowest bundle – at 500MB – provides at least 2.5 times the average O2 customer’s current use, said Dunne.

“We know that customers are looking for clarity in pricing as too many offers have clauses and catches which are not easy to understand. With the wide range of internet based services now available on mobile devices we’re providing customers with generous clear data bundles that give customers freedom. This enables us to provide a better overall experience for the vast majority of customers and to better manage demand,” Dunne said.

“By doing this, we are laying the foundation for a sustainable data experience for all customers and the huge possibilities that technology will create over the coming years.”

From June 24, also known as iPhone Day, O2 will introduce three data bundles for new and upgrading smartphone customers.

O2 Smartphone Tariffs* Consumer 24 month contract

Monthly cost £25 £30 £35 £40 £45 £60
Mins 100 300 600 900 1200 Unlimited
Text unlimited unlimited unlimited unlimited unlimited Unlimited
Data 500 MB 500 MB 500 MB 750 MB 750 MB 1 GB
Wi-Fi unlimited unlimited unlimited unlimited unlimited Unlimited

*Usual BlackBerry supplement applies

Users will also be able to buy additional data Bolt Ons which include 500MB for £5 or 1GB for £10 and O2 will send users regular text messages to help them manage their usage. Unlimited wifi will still be included through The Cloud and BT Openzone hotspots.

In related news, O2 has revealed details of its ‘Early upgrade” offering for eager iPhone users wanting the iPhone 4. It will cost £20 per month on top of the existing tariff, for the remainder of the contract; the signing of a new 18 or 24 month contract and the cost of the new hardware, which is as yet unannounced.

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3 comments

  1. Carl Barron 10/06/2010 @ 8:32 pm

    UK’s Tele Coms not keeping pace with demand

    I appreciate that O2 is at least being honest informing its customers. Yet this does not get away from the fact that the telecommunications Companies in the UK are not keeping pace with the huge increased demand for legitimate downloaded products.

    Meanwhile the OFT Office of Fair Trading should halt the miss selling of Broadband by many ISP’s falsely stating unlimited usage when in fact they are not. Businesses are being affected by the restrictions placed on ‘Legitimate Downloads’ of both music and Movies due to low Gig caps. All this at time when new products, which keep markets flowing, are being seriously affected.

    Meantime the UK Government is seeking to criminalize all Net users to gain revenue by the introduction of new Laws. See here for details: http://tinyurl.com/35phmvt

    Signed Carl Barron Chairman of agpcuk

  2. Tim Hayward 10/06/2010 @ 10:20 pm

    How is it that the voice minutes in these O2 plans go op by 12 times between the lowest and highest plan, but the data only doubles?

    It should’ve been: 500, 750, 750, 1GB, 1GB, 2GB

  3. Mike Manzo 11/06/2010 @ 9:36 am

    In saturated markets such as the US and UK, the success of data-hungry applications and consumers’ expectations for all-you-can-eat data plans are leading to a capacity crunch. Even with this week’s announcement that O2 was increasing network capacity, today’s news that it is rethinking the way it allocates existing capacity shouldn’t come as a surprise.

    In many markets, flat plans have become the rule for data-hungry devices such as the iPhone, creating no incentive for users to monitor their behaviour. Creating tailored services and differentiated plans could help consumers save on their bills and motivate them to adapt their use, optimising the way the network is utilised. Network operators need to put parameters in place so that all consumers receive the network performance guaranteed in their contracts. But for that to happen, they need to re-evaluate their pricing strategy.

    Following the move by AT&T to face the taboo of flat rate plans and offer consumers a transparent and fair deal for their data consumption, this is a brave move by O2 and one that will force the mobile industry to face the capacity crunch challenge and rethink current business models

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