UK operators push mobile internet with price cuts

UK operators continued to drive adoption of mobile broadband services this week, cutting prices further in a bid to reduce return rates after disappointing experiences.

On Monday, O2 UK slashed the price of its stand alone 3G dongle on a prepay tariff from £97.86 to £29.99, and has refreshed its tariffs with three options now available.

Customers can pay £2 a day for 500MB of data, £7.50 a week for 1GB or £15 a month for 3GB, and all come with unlimited wifi access via O2’s partnership with The Cloud.

After years of 3G hype and the recent clearing of the fog of disillusionment, mobile broadband that has become an unexpected runaway success. Industry analyst and telecoms.com parent, Inform Telecoms & Media, notes that at the end of June there were 14 million HSPA subscribers in Europe, accounting for about 2.5 per cent of the total customer base, and growing by 3 million every quarter.

At the company’s Mobile, Broadband and TV Outlook 2009 event last week, analysts commented that there is also a noticeable trend of consumers using mobile broadband services to replace their fixed line internet, often with disappointing results.

This rapid growth means that the networks are taking a real hammering, and coupled with the quality of service issues arising from 3G’s poor in building coverage, the analysts are warning carriers to start investing in backhaul and in capacity rather than coverage in order to keep the subscribers sweet.

This problem has obviously not gone unnoticed by O2, which last month launched a mobile broadband coverage checker and ’50 day Happiness Guarantee’. Since these measures were launched, the operator claims it has seen a considerable drop in the number of returned dongles, and reckons consumers are better informed at the point of sale.

Also pushing mobile internet usage this week is UK MVNO Virgin Mobile, which said that from December 8 it will offer ‘unlimited’ web access via the handset for just £0.30 per day. The company is attempting to drive traffic to its own mobile portal, but the offer also allows consumers to surf off portal as well.

Virgin’s fair usage policy in this case is 25MB per day.