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O2 scraps unlimited data for smartphones

O2 heralded a major change to the UK mobile phone market on Thursday by announcing that its bandwidth-hungry smartphone customers will pay more if they are heavy surfers of the web.

The UK’s second-largest mobile operator, which is owned by Spain’s Telefónica, is scrapping so-called “all-you-can-eat” data plans under which smartphone customers could do as much web browsing as they want for a fixed monthly fee. Instead, customers will pay according to how much data they consume each month.

Orange and T-Mobile, which have combined to form the largest British operator, are preparing to follow O2’s move, together with Hutchison Whampoa’s 3UK. Vodafone has taken some steps to end unlimited data plans, although analysts said its arrangements were not as tough as O2’s.

AT&T last week became the first big US mobile operator to announce it was scrapping its unlimited data plans for smartphone customers.

AT&T and O2 struck deals with Apple in 2007 to sell the iPhone, and both operators have suffered network overloads linked to the bandwidth-hungry smartphone.

From June 24, when O2 starts selling the fourth version of the iPhone, it will introduce monthly charges for customers under which their data usage will be capped. The charges will apply to new customers as well as existing ones who upgrade to a different smartphone.

For example, a smartphone customer paying £35 a month on a two-year contract will be allowed to consume up to 500 megabytes of data. After that, it will cost £5 for every additional 500 megabytes of data consumed.

Under typical data usage, 500 megabytes amounts to watching 60 YouTube videos or looking at 5,000 web pages.

Ronan Dunne, head of O2, said the move to cap data usage was prompted by the need for the mobile operator to continue to make large investments in faster networks.

He denied suggestions there could be a customer backlash against the new charges. “If this provides the model for continued investment in infrastructure ... it has to be a great thing for customers,” he said.

O2 expects only 3 per cent of its 21.4m customers to have to pay additional charges because they breach the data usage caps. Many of the customers facing extra charges will be iPhone owners.

Mobile operators in many countries originally introduced all-you-can-eat data plans for the iPhone because they saw it as a key way to persuade customers to buy the smartphone.

They are starting to scrap the plans because smartphones are threatening to overwhelm their networks.

Источник: Financial Times

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