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O2 ditches unlimited data on iPhone

iPhone 4

By Nicole Kobie

Posted on 10 Jun 2010 at 14:03

O2 has ditched unlimited mobile data downloads across all its smartphone tariffs - including the iPhone - claiming most users don't need more than 500MB a month.

The move could prove risky ahead of the arrival of the iPhone 4, as fans of the Apple smartphone have become accustomed to unlimited data plans with the handset.

Customers on £25, £30 or £35 a month contracts will have 500MB of data downloads included. Those on plans worth £40 or £45 will have up to 750MB, while the top-end £60 a month tariff will offer 1GB of data.

The new rules apply only to new or renewing O2 customers; users with existing unlimited tariffs won't be affected.

O2 claims that 97% of its over 20 million smartphone customers wouldn't currently exceed the lowest bundle offering of 500MB, as that's 2.5 times what its average customer uses each month. The 3% of users exceeding the cap will be sent a text message warning and offered the chance to buy a top-up - 500MB will cost £5, while 1GB will cost £10.

The new price plan brings O2's charges closer in-line with what it charges for the iPad. O2 charges £10 a month for 1GB of data on the tablet, but £2 for 500MB if bought day to day.

The new data charges are revealed in O2's iPhone 4 price plans, which have been released today and are broadly in line with its existing iPhone tariffs. The company has yet to announce how much it will charge for the handset.

O2 chief executive Ronan Dunne said the move was necessary as data traffic on the network doubles every four months, while revenue remains "largely flat".

"Nearly a third of our data traffic is accounted for by just 0.1% of our customer base, for example; a stark imbalance by any conceivable measure, and one which often affects network performance for the rest of our customers," Dunne wrote in a post on the O2 blog.

"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," he added.

O2's new data plan follows that of fellow iPhone carrier AT&T. The American mobile operator last week capped its downloads, causing a backlash among users concerned that the cheapest 200MB package was too low for data-hungry devices such as the iPhone, while the other 2GB tariff was too expensive.

Garter analyst Jessica Ekholm said that as more and more people use the web on their mobiles, operators will be looking to reduce the demand on their networks.

While most users likely don't download more than about 200MB or 300MB a month, someone using more advanced features such as video might have to upgrade to the next tariff, she noted. "If you're looking at something like the iPhone, it's in a separate category as it uses more data," she said.

She said the cap might drive some to turn to a rival operator, giving a competitive advantage to those offering unlimited downloads. However, Ekholm sees the industry as a whole also capping downloads. "This is probably what a lot of operators are going to go towards, to be honest," she said.

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From around the web

User comments

"5MB will cost £5, while 1GB will cost £10"

Is that correct? surely not.

By a_byrne22 on 10 Jun 2010

Yet another con. 500MB will be eaten up with the new breed of smartphones. If you think about it, if users didn't require anywhere near the previous 2GB, as O2 are claiming, then, um, why would they even need to change it, hmm? This is so disingenuous, and so typical, too.

A very good reason not to use O2, this.

By Bureaunet on 10 Jun 2010

what the hell?

The whole point of an iPhone tariff was to have unlimited data usage... i never think about how much data i use, and i don't want to, apps are becoming more and more data centric.

I've been O2 for about 2 years and i think it's time for me to look at what other providers are offering.

By saqib_ on 10 Jun 2010

@a_byrne22

That's a typo - missing a few zeros. Thanks for flagging it.

By Nicole_Kobie on 10 Jun 2010

Contract?

Surely the unlimited data usage is in the contract between the consumer and O2?

If so aren't o2 breaking the terms of that contract?

@Bureaunet - couldn't agree more.

By j_smith14 on 10 Jun 2010

Correction

The new rules only apply to new or renewing customers. Story now amended. Apologies for the confusion.

Barry Collins
Online Editor

By Barry_Collins on 10 Jun 2010

I very rarely get a 3G link on O2, and in my area of the country I'm not alone - the O2 3G network is so bad. So no skin off my nose.

By grannybuttons on 10 Jun 2010

It's probably not worth my time to argue with you, but if those 3% decide to download a truck load it's costing o2 money which is then going to be passed onto other users. (if you hadn't noticed o2 is pretty pricey)

By franchise on 10 Jun 2010

More of the same

Well the iphone 4 is a definate technical improvement over the 3gs, but then any new phone would be using the current technology available.
The iphone 4 is hardly innovative however Apple to have a strong brand image that many will buy into.
Personally I will be sticking with windows mobile and Android, because they are more flexible and supported on better HTC handsets and without Apples almost totalitarian policies.

By subseb on 10 Jun 2010

@Barry

Are you sure? Before this change people were bound to the Fair use policy in thier contract (which didn't get enforced much unless the user went crazy). All they need to do now is start enforcing it.

The main benefit to this is that o2 could afford to charge less on the purchase price of the phone now. Unlikely, but possible.

By franchise on 10 Jun 2010

How much do I use?

How can I tell what data usage I actually use then, according to O2? Is there a chart somewhere of historic use?

Also interested in the shared account and if there is any additional.

By MJ2010 on 10 Jun 2010

@Barry

Are you sure? Before this change people were bound to the Fair use policy in thier contract (which didn't get enforced much unless the user went crazy). All they need to do now is start enforcing it.

The main benefit to this is that o2 could afford to charge less on the purchase price of the phone now. Unlikely, but possible.

By franchise on 10 Jun 2010

@MJ2010

On the iPhone, go into Settings ==> General ==> Usage, there you will see your Cellular Network Data usage. Right at the bottom you see the date since the stats were reset.

On mine, since 23/4/09 I have downloaded 193MB of data over O2's network and uploaded 42MB.

By james016 on 10 Jun 2010

The Cloud and BT Openzone

Do these new contracts still give free access to The Cloud and BT Openzone?

By james016 on 10 Jun 2010

YMMV

iPhone 3GS, four months. 1.8Gb used in total, for ever, since the start.

I think this will lose O2 customers and rightly so, but for me at least it's not really a deal breaker, just a bitter coating.

By colsmith on 10 Jun 2010

"I've been O2 for about 2 years and i think it's time for me to look at what other providers are offering."

I suspect you'll find much the same. T-Mobile offer 3GB on Android phones (and I think iPhones, although I could be wrong), but I know 3 is 500MB and I think Vodaphone is too.

By artiss on 10 Jun 2010

This is only to be expected. People's bandwidth usage is becoming unsustainable. Not just on smart phones, but on just about every internet connected device.

Back in the bad old days of narrow band you used to try to keep the size of your website as small as practical. You didn’t put in too many images or too much scripting as people could only download so much so fast. Now, with the advent of broadband, website designers have gone crazy adding in all kinds of thinks. A single banner ad can now use the bandwidth that an entire page used to use, and with the advent of services such as Youtube and Facebook this has ballooned even further.

You can use more bandwidth just browsing Facebook for 20 minutes than you used to use in a couple of days back when a 56k modem was the norm.

The trouble is that people (Both user and developers) are treating bandwidth as an unlimited resource, and an essential right. So people are getting upset when they are told that it isn’t.

There is only so much data that can be pushed through the mobile phone system before it reaches capacity, and when you get people using their iPhone and video streaming sites as if they were TV channels, you’re going to have problems at some point.

There have been constant complaints in the states about network capacity. People complaining that they have a good signals but almost zero downstream speed capacity. Well, this is often because there are just too many people using too much bandwidth.

It’s like being in a dorm room and finding that you cannot download something important because some fool has a badly tuned P2P download going on across 3 PCs, that’s sucking in millions of minute packets in an effort to get the latest episode of lost 10 seconds before anybody else, and is playing havoc with the local network.

Maybe this move will force people to think about their bandwidth usage a bit more. Especially when it comes to trivial things like Facebook or other social network sites that people spend hours a day on but which have minimal value.

People have been abusing unlimited download packages, which is why they are being withdrawn. This minority is now harming the rest of us

By Perfectblue97 on 10 Jun 2010

500MB is reasonable

I've had my iPhone 14 months and am a relatively high user. I'm forever using Google Maps, often downloading YouTube video, always on the web, downloading all emails with attachments, etc, etc. Admitedly, I don't have the Sky player so don't watch TV on it.

I've gone through 750MB since I first got it. I'd have to watching TV regularly to go near the 500MB monthly limit and, frankly, if people want to do that on their phones then they SHOULD be made to pay extra for it.

By GillsMan7 on 10 Jun 2010

OFCOM/ASA to blame

The issue is simply that for far too long data connections, be they mobile or fixed line, have been sold as unlimited with no expectation that they'd be used as such. It's the oft visited argument we've had over home broadband.

Mobile wise, I'm quite a heavy data user since I got my Nexus One... I will admit I have no consideration for how much I use, and could probably moderate my use without any noticable drop in utility... but my contract that I pay for says unlimited, so why should I invest my effort in reducing my use. If the contract was sold with a limit of some sort, I'd be more considerate of my usage. In fact I might even have a clue what it is, but with various apps and widgets polling the network at regular intervals I suspect its tens of MB a day.

This move could be a step in the right direction, as it might mean we stand a chance of comparing like for like, although I suspect the telcos will do their best to obfusticate the issue.

At present all the networks have a different definition of unlimited, and it's nothing like the one in the dictionary. There's also no consistency in how they treat you once you've exceeded your unlimit.

As an aside, until very recently, loaves of bread had to be sold as small (400g) or large (800g) - just imagine what OFCOM could do if they were really creative.

By rsw75 on 10 Jun 2010

Surprised how little I use - 500mb is plenty

I consider myself a heavy user of my iPhone, using it every day on the bus and train, downloading podcasts, streaming radio etc. One of the nice things about the previous deal is that you never need to think about how much you use, and when I read this I was fully expecting to have to pay more to sustain my usage.

So I checked my usage for the first time (thanks to the other post describing how), and was surprised to see that since getting it almost 12 months ago I've only used 3Gb, so averaging 250Mb a month.

So in reflection, I think this is fair enough. 500mb should be ample even for a relatively heavy user, and anyone pushing past that shouldn't really begrudge paying the extra if they are using it that much.

By dafmeuk on 10 Jun 2010

Enough - for how long?

"...500MB, as that's 2.5 times what its average customer uses each month"
"data traffic on the network doubles every four months"

So, 500 is plenty for now - but will not be in around 5/6 months?

What happens then - or is this doubling of traffic only due to the 0.1% of heavy users?

By greemble on 10 Jun 2010

"Unlimited" = 500MB

Think most of you have missed the point to be honest. Look at 3's "unlimited" internet and it is subject to a fair use policy of... 500MB/month. Seems to me that O2 are just being honest.

By halsteadk on 10 Jun 2010

_______

"O2 claims that 97% of its over 20 million smartphone customers wouldn't currently exceed the lowest bundle offering of 500MB"

So if they're not using the data, why change the limits? Surely it's just incurring bad publicity for no real benefit.

If of course, that statement is true.

By Lacrobat on 11 Jun 2010

500MB...

I've had my iPhone for about 9 months now. I've just checked and I've received 466MB and send 128MB of data in that time...

By big_D on 11 Jun 2010

@perfectblue97

"Maybe this move will force people to think about their bandwidth usage a bit more. Especially when it comes to trivial things like Facebook or other social network sites that people spend hours a day on but which have minimal value."

Maybe it has minimal value to you but I'm pretty certain its a big deal for a lot of other people. Seems like a somewhat narrow minded view to me.

The point I was going to make though is you say people need to be aware of bandwidth usage and sites like Facebook that eat it up but dont forget its the networks themselves that sell this to customers. How many times have you seen adverts for providers offering the lastest phones tagging on logos for Twitter and Facebook? Its hardly right to then start moaning that people are using these sites.

By pveater on 11 Jun 2010

@GillsMan7

I don't have an iPhone so I'm not invested in this article but I do have a question:

"frankly, if people want to do that on their phones then they SHOULD be made to pay extra for it"

Why?

By timfrance on 11 Jun 2010

@timfrance

Why shouldn't they pay in proportion to the amount of data they use if their usage is genuinely excessive and impacting others?

By halsteadk on 14 Jun 2010

You can use DataMan app to monitor your data use in real time. You can also define 4 custom usage thresholds. You will be notified when you exceed the thresholds. This will help to stop additional charges on your bill. You can find DataMan in the App Store.

By datamanapp on 5 Oct 2010

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