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15
Jun
2010

O2's data pricing model designed for the future

POSTED BY Global Administrator
O2's announcement of a new tariff plan, which prices unlimited call minutes texts and 1GB of data at £60/month, certainly seems to open the doors to tiered pricing, at O2 at least. And surely its only a question of time before it is replicated across the board.

I must admit, I have not been checking mobile operators' tariffs with a fine-toothed comb recently, but for some time the consumer has been getting a pretty good deal on mobile data. Operators have been left to work out how to cope with increasing data usage.

Interestingly, 02 claims that the vast majority of users will not be affected by the tariff changes. "Based on current usage patterns," says O2, "97% of O2 smartphone customers would not need to buy additional data allowances, as the lowest bundle (500MB) provides at least 2.5 times the average O2 customer’s current use."

That may be the case, but at least O2 does have the chance of garnering revenue from heavy users, charging those whose usage is disproportionate relative to the rest of the smartphone using population.

Of course, usage is only going to go up over time, presumably increasing the number of £60 per month subscribers. But O2's new tariffs give another indication of the direction of travel of the data market: WiFi use is unlimited, whatever package a user is on, and as WiFi/ 3G handover becomes seamless, more and more, operators will seek to reduce the burden on their 3G networks through WiFi.

For this reason WiFi, perhaps more than the 3G data tariffs announced, is at the heart of the "sustainable data experience" that O2 alludes to in its press release on its new mobile pricing model.