O2 slashes tariffs to revive momentum for mobile broadband
Published: 5 November, 2008
European operators have been seeing enthusiastic levels of uptake of mobile broadband services based on dongles or even low cost notebooks, and these tactics have driven welcome new contracts and ARPU. But as the incentives become more extreme - right down to 'free' laptops - the carriers are sure to enter a price war to keep the momentum going, at the same time as user expectations of the services rise. O2 UK is setting the pace for many western European carriers, slashing mobile data costs in an attempt to move ahead of its rivals. O2 will also be trying to revive excitement about its service, after it found high levels of dissatisfaction with "deceitful" pricing and spotty coverage.
With about one-third of users complaining that their bills turned out to be higher than they had expected, and one-fifth upset by lack of coverage, O2 has refreshed its mobile broadband model to make charges more predictable. International roaming is not automatically activated, there is a new coverage checker, and a 50-day 'Happiness Guarantee' allows customers who purchased directly from O2 to return the device if they are not happy, with no termination fees and a full refund.
Tariffs have been cut too. For business, or heavy mobile broadband users, there is a new 10Gb package for £30 a month on a two-year tariff, and the price of the 3Gb package has been cut to £15 a month for a two-year deal, belatedly matching the offerings from Vodafone and Orange. O2 is also partnering with The Cloud to offer all its customers unlimited Wi-Fi through any of its 6,100 hotspots.
3 remains the most aggressive European operator in this market, with pay-as-you-go dongles and a Broadband Lite option that offers 1Gb for just £5 a month for existing customers (£10 for new ones) with an 18-month commitment and free modem.
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