Mobile broadband rates fall again in ultra-competitive UK
Published: 2 December, 2008
The UK is becoming one of the most attractive countries for mobile users, with its fiercely competitive operators cutting mobile broadband rates again and promising to pass on the recent government cut in VAT (value added tax).
O2 already reduced rates for its dongle-based services last month, facing rising competition and the threat of a consumer backlash against the hidden costs of mobile broadband. Now the Telefonica-owned cellco has followed 3 in introducing new pay as you go options for its dongle, and has cut fees again.
It has slashed the price of its standalone 3G dongle on a prepay tariff from £97.86 to £29.99 ($145 to $45), and has introduced three new tariff options. Customers can pay £2 a day for 500Mb of data, £7.50 a week for 1Gb or £15 a month for 3Gb, and all come with unlimited Wi-Fi access via O2's partnership with The Cloud hotspot operator (O2 makes much of its dual-mode 3G/Wi-Fi dongle, which automatically selects the best connection in range).
With other cellcos expected to follow O2 in new mobile broadband deals before Christmas, the other trailblazer is the largest MVNO, Virgin Mobile. The company will offer "unlimited" web access via the handset for just 30 pence a day from December 8, it said (fair usage limits are 25Mb per day). This is designed to drive usage of its own mobile portal (though off-portal surfing is not restricted). Virgin has upgraded its portal, becoming the latest cellco to choose Yahoo oneSearch as its default search engine, in preference to Google.
Meanwhile, all five UK mobile carriers have hinted that they will lower prices in light of the government's decision last week to cut VAT from 17.5% to 15% until the end of 2009. The cellcos have not yet detailed how they might pass on the savings, though options include reducing contract bills and lowering the cost of prepaid top-up cards, or including extra voice minutes, texts or data up to the value of the VAT cut.
In a statement, O2 said: "Where we can't make an immediate change to our customers' packages, we will make sure they receive any amount due backdated to December 1 when the rate change becomes effective."
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