The word on the wires Tuesday morning is of growing support for a consumer protest against O2 UK’s recent decision to introduce tiered data tariffs and do away with unlimited offerings.
The protest movement, which is being organised on Twitter as #O2DataDay, calls for O2 smartphone users to gobble up their entire data allowance on June 24 – the day O2 switches over to its new tariffs for incoming and upgrading users, which is also the day the iPhone 4 launches.
The idea, so telecoms.com understands, is not to bring down the O2 network, but to make the point that the carrier’s customers really want and need their unlimited data allowance.
The proposal however, is seriously misguided. If the movement gathers enough momentum, not only will it ruin the experience for all O2 customers, including those not participating in the protest by putting the network under abnormal strain, it will also generate more revenues for O2.
If new or upgrading users – which will only get the chance to sign up to one of these new contracts on the day of the protest – do participate and squander their entire data allowance in one go, they’re going to leave themselves without data for the rest of that charging period. Which means they’ll have to buy a bolt on from O2 to see them through.
A number of readers have pointed out that new and upgrading subscribers to the tiered tariffs will benefit from an introductory period where: “Unlimited data on all smartphone tariffs is a promotion until 1 October 2010″. However: “Excessive usage policy and terms apply,” to this offer too. So O2 “reserves the right to impose further charges, impose network protection controls which may reduce your speed of transmission…or disconnect your SIM”.
The majority of protesters – and we’re probably talking iPhone users here -will probably still be on their existing contracts which also allow ‘unlimited’ data usage. Although it’s never really been ‘unlimited’ anyway, because of course there’s a fair usage policy, which we understand comes into play around the 1GB mark, although that’s not apparent in O2’s terms and conditions. This highlights the logistical problem of carrying out such a protest. Not only will users have to download a heck of a lot of content to hit their limit, how will they do it? App Store apps cannot be downloaded over the air if they are larger than 10MB, so users will have to install a download manager app and then find some big file and download it in one go. They won’t be able to exit said download app and user another due to the lack of multitasking on the iPhone. Not unless they’ve installed OS4 anyway.
The final point, and this is one O2 CEO Ronan Dunne has been trying to hammer home, is that the vast majority of users will get a better deal. We’ve been here before in the fixed line broadband world. It’s only the really heavy users who will suffer – that 0.1 per cent of O2’s customer base that accounts for nearly a third of all data traffic.
Even using the iPhone to consumer data on a day to day basis, it’s pretty difficult to top 500MB in a month, so taking only the bucket of minutes into account, a good few consumers can probably lower their monthly expenditure. “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,” said Dunne. “The vast majority of our users will be completely unaffected by the changes – 97% of our smartphone customers currently use less than 500MB of data every month.”
It has been a long time coming and there have been well documented issues in the interim, but O2 is finally addressing the problem. “At O2, we’re seeing a doubling of data traffic on our networks every four months,” said Dunne. “Though, the way that we charge for this data is pegged to an old flat-fee, all-you-can-eat model designed for a far less data-hungry audience.”
Dunne claims that O2 invests £1m every day in its networks and recently announced plans to upgrade the infrastructure in central London.
Will regulators ever be able to catch up with the rate of change in the telco/tech industry?
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