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O2 mobile broadband 'not competitive'

22 апреля 2008

Analyst firm says Web offering is part of a churn reduction strategy rather than a big push into mobile broadband.

O2's mobile broadband offering which launched last week has already come in for criticism, as Ovum Monday said the service is "ultimately not competitive".

"O2's complementary mobile broadband offering is interesting from a market positioning perspective, but ultimately it is not competitive for consumers, even existing customers," said Steven Hartley, a senior analyst at Ovum, in a research note. "Like O2's fixed offering it is unlikely to set the market alight."

Customers can either take out an 18-month contract for which they pay £20 per month and receive a free USB modem, or they can opt for a one-month rolling contract for £20, but will have to buy the modem for £119.99. In each case subscribers have a 3GB data limit per month.

What's more the service is only available to O2's mobile customers, and ITS fixed-broadband subscribers.

"None of the other MNOs make this stipulation…A focus on existing customers emphasizes a churn reduction strategy, which contradicts O2's SIM only customer acquisition drive," said Hartley.

The analyst also said that O2's mobile broadband tariffs are relatively expensive.

"For the equivalent length of contract and usage limits, O2's 18-month contract is £5 more than 3's, Vodafone's and T-Mobile's. The one-month contract is the same price as Vodafone, but the one-off USB modem fee is £20 more expensive," said Hartley.

He predicted that mobile broadband offerings are likely to compete on price, much the same way as in the fixed space.

"The longer term outlook for mobile broadband is similar to that of fixed broadband – falling prices and a need to focus on value-added services or survive as a bitpipe," he explained.

O2 is offering three gigabytes of data usage per month on its mobile network, as well as access through WiFi hotspots provided by its partner The Cloud, for which a fair usage policy applies.

"Only T-Mobile also includes WiFi, and shows how mobile broadband offerings are converging with those from fixed ISPs.

The company on Friday became the last mobile network operator (MNO) in the
U.K. to launch a mobile broadband service.

O2 has been slow to build out its 3G network, and was even threatened in February with having its licence cut short by Ofcom for failing to meet its rollout obligation.

The operator needed to provide 3G network coverage to 80% of the population by the end of 2007. However, the
U.K. regulator said by the time the deadline passed O2 could only manage 75.7% coverage.

Источник: Total Telecom

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