UK operator O2 has launched a new set of mobile broadband tariffs to attract unhappy users. The company has cited recent research which suggested that the shine was rapidly coming off the growing use of mobile broadband in the UK.
O2 said that the online research, conducted by OnePoll last week, showed that over one in ten mobile broadband users felt that they were "mis-sold on what it offered". Apparently, the main source of irritation for 1,000 UK-based respondents was the feeling that they had been deceived on the cost of the service. Nearly a third complained that the ongoing cost was higher than expected.
Exaggerated coverage levels also seems to be an issue, with one-fifth of respondents upset that they were unable to use mobile broadband where they wanted it, despite being told by operators that there would be coverage. Another 13 per cent were frustrated that there was no returns guarantee if the service wasn't right for them, and around half wanted inclusive Wi-Fi as standard.
On the back of this research, O2 has announced a refresh of its mobile broadband model. This refresh includes making it easier for customers to be certain of their ongoing spend. In addition, international roaming will not be automatically enabled for all new O2 mobile broadband customers so that users are not surprise at the high cost of international roaming. Instead, new customers will need to contact O2 customer service to have roaming activated, so the likely (high) costs can be fully explained.
O2 also says it is launching a new coverage checker and a 50-day 'Happiness Guarantee', which allows customers who purchased direct from O2, to return the device to O2 within 50 days of purchase with no termination fees being charged and any costs for purchasing the device being refunded.
Mobile broadband prices have been cut as well. For business, or heavy mobile broadband users, the UK operator is introducing a new 10GB package for £30 per month on a two year tariff. The price of its 3GB packages has also been reduced to £15 per month, matching existing offerings from Vodafone, Orange and others.
Customers purchasing an 18-month or 24-month contract will also receive a free USB modem.
O2 is also partnering with The Cloud to offer all its customers unlimited Wi-Fi through any of its 6,100 hotspots.
"Across the industry there are too many customers whose mobile broadband expectations have been set too high and have then been disappointed, which is a terrible shame given there are loads of people who are having a great time with mobile broadband," said Peter Rampling, marketing director at O2.
But there is little doubt that O2 has been very slow to match the £15 per month mobile broadband tariff that other UK operators already offer.
Other rivals such as Vodafone, T-Mobile and Orange have for a while now typically charged £15 a month for a service based on 3GB of downloads per month.
And back in May, UK operator 3 announced that its Broadband Lite service (1GB of downloads, 18-month contract, Huawei HSDPA modem), would be only £5 per month for existing customers (£10 per month for new customers).
O2 was one of the last mobile operators to launch a mobile broadband service back in April this year, again way behind that of its rivals. Back in February this year, the operator was also threatened by the UK regulator Ofcom, over its failure to meet its 3G roll out obligations.
"It is reasonable to say that O2 has the smallest 3G coverage in the UK, so the improved coverage checker makes sense," said Steven Hartley, senior analyst at Ovum. "O2 is playing catch up, but there is nothing here that no-one else is already doing. What it does do, is bring O2 up to the level of the others."
Hartley feels that in countries with high levels penetration of fixed-line broadband, mobile broadband will always remain a complementary service outside of certain niches (mobile workers, people who rent, students etc).
"Fixed broadband penetration across Western Europe is simply too high", said Hartley, the author of an Ovum report on mobile broadband published in September. "Mobile broadband cannot compete with fixed on speed or capacity, particularly as high bandwidth applications such as IPTV take off".
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