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Posted on June 11th, 2010 by Barry Collins

O2 data charges: punishing the many to pay for the few?

iPhone 4 backO2 has delivered some astonishing statistics to justify its controversial decision to scrap unlimited data plans. In a blog post published by chief executive Ronan Dunne, the company claims that only 0.1% of its customers consume almost a third of the data of the network, while the average O2 user consumes only 200MB of data.

“We don’t think it’s fair that the many should subsidise the behaviour of the few, and we think that we have a responsibility to our customers to address this kind of imbalance,” Dunne stated.

I’ll have you know that I’m the proud holder of A-level maths (grade C), and so I’ve dug my calculator out. By my reckoning:

O2 had 26 million customer accounts at the start of 2010, so it has 26,000 heavy data users

26 million x 200MB = 5,200,000,000 MB total data usage across the network per month

5,200,000,000MB  ÷ 3 = 1,733,333,333MB per month used by the 26,000 heavy data users

That means the average heavy data user consumes a staggering 66,666MB (so around 65GB) per month

Quite how anyone manages to download 65GB per month over a 3G connection is beyond me. You’d have to be running the connection round-the-clock. And indeed, when I put that scenario to O2’s press office, the spokesperson said that’s exactly what’s happening.

But instead of punishing the few to protect the many, O2 has done the exact opposite: it’s put a 500MB cap on previously “unlimited” accounts to ward off the data hogs.

If the rapacious appetites of the minority was causing O2 such a problem, why didn’t it impose a ceiling of, say, 5GB a month? By my calculations (A-level maths, remember) that would still wipe almost a third off O2’s total data traffic and only potentially infuriate a relative handful of its customers.

Instead, 26 million customers are now going to have to keep a careful eye on their data consumption, or risk being hit for excess charges of £5 per 500MB.

O2 insists that 97% of its smartphone customers will be unaffected by the 500MB cap and that the new charges will allow it to better plan investment in its network. “We have invested £½ billion in our network over the last two years; £10bn to date,” an O2 spokesperson told me. “In November 2009 we unveiled plans to accelerate our network growth, totalling £100 million over the coming year. This includes building 1,550 new sites across the UK by the end of this year.”

That’s all well and good, but let’s not pretend  an enormous data bill is destroying O2’s finances. O2 owner Telefonica recently announced annual profits of €1.6 billion, with its earnings statement paying tribute to the enormous growth in revenue from mobile broadband services.

O2’s CEO describes these changes as “fair and transparent”. I’m willing to credit him with the “transparent” bit.

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32 Responses to “ O2 data charges: punishing the many to pay for the few? ”

  1. Ed Says:
    June 11th, 2010 at 11:45 am

    I suspect these ‘heavy users’ are simply tethering their jailbroken iPhones to their PCs for cheap home ‘broadband’…

    I consider myself a ‘heavy’ user and I rarely top 1Gb/month.

  2. John Says:
    June 11th, 2010 at 11:48 am

    Clearly the EU is looking into this and will once more come down on the side of customers. In the meantime, goodbye O2. and should all operators follow suit, Hello anti-trust court case.

  3. colsmith Says:
    June 11th, 2010 at 12:08 pm

    Ed; I think you’re right. but more than that isn’t it clear that O2 is simply using this as an excuse to grab extra pennies of thousands of lower-use users? Why upset 26k users a lot when you can upset 260k users just a little bit (the first time they get caught out)?

  4. Gary Says:
    June 11th, 2010 at 12:23 pm

    Good article. I’ll certainly be saying goodbye to 02.

  5. Jim Says:
    June 11th, 2010 at 12:44 pm

    If some users are effectively consuming 2GB per day, why isn’t O2 just exercising the “fair use” policy part of the contract and cutting them off? Why should the rest of us suffer because of some selfish b%^&*^&?

    I’ll be sticking with my unlimited data contract until the end and if O2 hasn’t relented by then I’ll be going to whichever provider isn’t screwing its customers.

  6. Ed Says:
    June 11th, 2010 at 1:01 pm


    Yup. There are ways they could target just the heavy users – Traffic shaping and fair-use policy enforcement the first that come to mind.

    I think it’s a rash decision that they will come to regret. All it will take is one competitor to offer a unlimited data deal and they will lose huge numbers of customers. And if they all clamp-down on data I think John might be right in saying the OFT might have something to say about it.

    O2 say 97% of people don’t go over the limit, but that isn’t really the point. People value peace of mind.

  7. Mark Says:
    June 11th, 2010 at 1:09 pm

    Very dissapointing.
    I suspect that the real reason behind this is that the O2 data network can not handle the volume of data and they want to protect their business users.
    I use the data network a lot, but each use is low volume and I have noticed response times and relaibility drop espicially with VPN connections.
    I’ll be voting with me feet.

  8. Steve Cassidy Says:
    June 11th, 2010 at 2:07 pm

    Could the complainers say, while complaining, what their actual monthly data volume is? Nothing wrong with a good old complain: would be interesting to know if 02 are right about how few are going to be unaffected. A bit like stamp duty, it only takes a bit of an overall rise or the spread of a data hungry “killer app” and last year’s tiny percentage becomes next year’s “growing minority”

  9. Alan Says:
    June 11th, 2010 at 2:11 pm

    It only comes into effect for upgrades to existing accounts if they’re processed long after the iPhone 4 early upgrade scheme expires.

    Combined with the savings made for terminating contracts early (number of months multiplied by £20 instead of your usual monthly tariff) it seems like a nudge for those in contract to upgrade now to get their iPhone 4 with the assurance of unlimited data for a bit longer

    Meanwhile, O2 rakes in an instant amount from people that might be eyeing up a move to other networks, and secures itself a lot more income over the next 18 to 24 months.

  10. the colonel Says:
    June 11th, 2010 at 2:22 pm

    so which Utopian network will everyone be moving to? I have a 500meg limit on vodafone and will be moving back to o2 as they at least provide free wifi…. Also, in 18 months I’ve never got close to the 500 Meg limit, so I’ll benefit cost wise by going for one of their lower tariffs.

  11. Jon Sandys Says:
    June 11th, 2010 at 2:57 pm

    “26 million customers are now going to have to keep a careful eye on their data consumption” – not at all, given that those 26m use around 200mb a month. They could double their usage and still have room to spare. I’m amazed at the number of people reacting so indignantly at the scrapping of “unlimited” (because no unlimited plan ever is) limits, given that most people won’t come near the new upper limit anyway. It just seems to be a general sense of unjustified entitlement – unlimited deals were clearly unsustainable, so 02 is starting down a path everyone else will follow along.

  12. John Brown Says:
    June 11th, 2010 at 3:31 pm

    ata access is taking over as the primary driver for mobile technology, leaving phone calls and texts by the wayside. With the iPhone 4 adding technology that further thrusts it into the Skype world; of course mobile operators are going to focus their billing on data usage rather than voice minutes.

    But there needs to be give and take. By all means charge me for my data (reasonably) but then give me unlimited free phone calls and texts in return. I can assure you I won’t use them much.

  13. Barry Collins Says:
    June 11th, 2010 at 3:31 pm

    Steve – it doesn’t matter whether most people exceed the 500MB or not. O2 is now forcing people to take care with their data, where previously, by the network’s own admission, 97% of smartphone users weren’t causing a problem.

    If it had dealt with the data-gobbling minority, it could have left the vast majority of its customers in peace.

    For what it’s worth, my monthly data downloads are around 650MB, largely due to Spotify mobile and a rapacious appetite for podcasts.

  14. Paul Willis Says:
    June 11th, 2010 at 3:38 pm

    I’ll be switching to, owned by O2 and running on the O2 network, offers unlimited data and no plans to change for £10 per month

  15. usman Says:
    June 11th, 2010 at 4:22 pm

    Actually, paying £5 for 500mb is a bolt on, meaning you have to pre order it. Customers who unwittingly go over their allowance will actually be charged on a sort of pay and go rate where their cap will be around £1 a day. I say this having worked for o2 in the past although they could well scrap this too.

  16. The colonel Says:
    June 11th, 2010 at 6:51 pm

    If it’s that much of an issue for people one solution would simply be to buy the iphone handset outright and keep your existing contract- the old ‘unlimited’ t&cs would still apply.

    This would of course be expensive, so the alternative would be to take out a new contract, get the handset for less (or perhaps an arguably better android set for free) and sit back amazed as they continue to use less than 500megs a month…

  17. adzman808 Says:
    June 14th, 2010 at 11:41 am

    Like others have said – the problem is caused by PAYG users using the o2 network as a slow yet cheap & unmonitored way to rinse P2P web based utilities.

    As o2 can’t identify these users & shut them down (PAYG users are hard to trace once SIMs have been swapped & traded) then o2’s only real option to make their money back by hitting contract customers… It’s kinda similar to how the police will go to great lengths to trace the driver of the car that has set off a speed camera, but are less motivated to trace the burglar of your home.. It’s hard to trace a burglar & if you find one then they tend to have no money for the fine, where as the motorist is easy to trace & can afford the fine.

    This is (imho) the same reasoning o2 are using to justify changing data on contract users accounts – it’s hitting the people it can easily hit, that are tied into contract with them, rather than pursue the true offenders against the fair usage policy.

    As previously said – a simple 1Gb a month (free) limit wouldn’t effect the genuine users, but would kill dead anyone downloading blue ray rips… but by playing it this way o2 would lose out on €millions of extra revenue, hence the revised pricing policy.


  18. B0B Says:
    June 14th, 2010 at 1:51 pm

    Hmmmm….I’m fairly sure this article is misleading and it is on ly new customers who do not get unlimited data – did an article on this when it was first announced.

  19. MrO2 Says:
    June 14th, 2010 at 11:20 pm

    The heavy usage of data is caused by iPhone (mostly) sims being switched into other devices to allow them to be used as unlimited data ‘modems’.

    ‘Fair-use policy enforcement’ isn’t something O2 do well for mobile data. They don’t have a proper system for monitoring usage against policy. Even when they can spot a heavy user it is a manual process to restrict their use and that costs money.

  20. lezavvit Says:
    June 15th, 2010 at 8:54 pm

    YOU MUST READ THIS! hi all ive been checking into this as a result of reading these blogs/google feeds and have come up with interesting results! i’ve spoken to (O2) today..and in 1 month after checking my history i used 6.5gb… just a freak month MAYBE? as this month i used 600mb? so …??? they are abusing the I WANT THE NEW IPHONE4 THING! BECAUSE THE’VE SUDDENLY BROUGHT IN THESE NEW TARIFFS JUST AS ITS RELEASED SO YOU LOSE (UNLIMITED)!!!!…READ ON!??)
    As ive got a iphone 3g on simplicity unlimited. And if you upgrade,or take out a new contract… to get the beatiful and tempting iphone4, then you will lose your unlimited status! if you dont move they cant take it off you! now i have read some/most of these blogs and i dont think that heavy users should be penalised for using the service we/i have paid for! its SUPPOSED TO BE UNLIMITED.yet i got cut off with my free UNLIMITED bolt on,(subject to the unfair usage policy,lol,and had to upgrade another five pounds a month! I would also like to say i dont use my phone as a modem or stay on it all day, i have a full time job! i just cant do that! i do facebook poker and occasionally watch tv via iphone/ ,great if your out and want to see the football..etc. PLEASE DONT BE A FOOL IF YOU TAKE OUT A NEW CONTRACT YOU WILL GET UNEXPECTED DATA CHARGES!! MAKE SURE U DEFINATLY GET UNLIMITED DATA (NOT WIFI)3G!!I WELCOME REPLYS TO LEZAVVIT@YAHOO.CO.UK AS IM INTERRESTED IN THIS AS (I) WANT ONE!LOL.. GOOD LUCK IN THE MINEFIELD.LEZ

  21. Steve Andrew Says:
    June 15th, 2010 at 9:36 pm

    Thanks Barry. I will not credit them for anything. Paying £10 every month for around 200MB as they claim – an average user, it is ridiculous. You see how the made the 1.6 billion profit, and now they try to put a cap, it is outrageous. I wonder if the ombudsman should step in.

  22. dave Says:
    June 16th, 2010 at 9:55 am

    shicked, stunned, didnt AT&T just do the same? me thinks its a global descision to oppress internet freedom watch what happens to our freedoms over the next 24 months

  23. Tony Says:
    June 17th, 2010 at 11:04 am

    This is not a genuine reason from O2. Clearly, the current data hogs, who are presumably presently on an existing unlimited contract, will just stay put with their current iPhone, thereby retaining their unlimited status. They do not get touched by the changes, and the typical users, those who innocently upgrade or purchase anew, will be the ones who lose out.
    This is simple profit adjustment by O2. Nothing more.

  24. Darren Nicholls Says:
    June 17th, 2010 at 11:49 am

    On reading this news, I reset my usage montitor. In less than a week, I’m up at 670MB. I’m a Spotify user and have watched the odd bit of the World Cup although with spotify I generally move tracks offline. I’ve also used the GPS intermittently. If I’m top 3% I’m absolutely astounded.

    I’m sticking with my 3GS. There is no way I want an iPhone4 that is capable of so many things shackled by data restrictions. If you’ve used the Iphone abroad, you will have already experienced the pointlessness and frustrations of a smartphone due to the high cost of data.

  25. Chris Gomez Says:
    June 18th, 2010 at 12:08 pm

    The price may be excessive, but I fully support the concept of offering a price for a straightforwad, unambiguous amount of data, rather than an ‘unlimited’ plan that is not in fact unlimited.

  26. lezavvit Says:
    June 20th, 2010 at 11:43 am

    chris gomez ?__ what!? your wrong my friend, if thats what you think look forward to a 80 pounds bill !! its just a money making scheme because they havent got the exclusive right this time. also further to that o2 are a bit dumb and have missed a trick as they should have done this when if you wanted a iphone you HAD to be with them! its commercial suicide if people are WISE ???????? I WANT TO POINT OUT I HAVE POSTED THIS BECAUSE I FEEL VERY STRONGLY ABOUT THIS & DONT WANT PEOPLE TO BE TIED IN FOR 24 MONTHS TO THIS SCAM!!!!

  27. lezavvit Says:
    June 21st, 2010 at 2:10 am

    darren nicholls has got IT!!!!….
    THE WINNER!! sorry no prize apart from YOUR, no mug! thats being ripped off !!for a contract thats going to hurt u in the upcoming months!

  28. Alan Robertson Says:
    June 22nd, 2010 at 12:50 pm

    Looks like I’be sticking with my T-Mobile 3GB/mo for £12.50/mo deal then!

  29. Nicholas Says:
    December 29th, 2010 at 1:26 am

    I just realised I’ve been paying upto 100 per month for data! O2 are crooks and I’m not paying. I’m switching my account away. In one transaction the claimed I used 1.3gb of data!!! I use email and occasionally browse the web. This is ridiculous. They should be fined.

  30. 50 calibare ammo Says:
    March 7th, 2011 at 1:49 pm

    Why do people asume you can recieve a huge bill from o2…if you reach your data limit, unlike most money grabing networks(3, voda) o2 dont charge you, they just slow your download leaving you with the options to still email and browse facebook etc…Its not possible for you to recieve charges for data unless you are roaming and are that stupid that you use the data with out a data tariff in which case you get 200mb for £1.00….Compare that with the other networks before you bitch…..

  31. Lezavvit Says:
    March 27th, 2011 at 2:32 am

    Mate your comment cracks me up ! I’m on a 50 pound simplicity deal that I got before this shizzle happened !! Which gives me unlimited everything inc 3G !! Fool ! Your obviously not a heavy user and therefore IMMUNE because your not using you phone as it was intended for use ! I.e streaming t.v / you tube and general abuse !!

  32. John Jones Says:
    October 23rd, 2014 at 11:34 am

    I was in South Wales and had no signal on my vodafone. My son was in hospital after having Heart Surgery so I tethered my phone to my work 02 phone for the 7 hours in work. I was only using WhatsApp and Facebook. They want 100 and 210 pounds for the 2 days that I used there Internet. They can do one


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