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UPDATE O2 UK Attacks ISP Speeds and Reveal New Broadband and Phone Deals

Posted: 02nd Sep, 2010 By: MarkJ
o2 uk broadband logoBroadband ISP O2 UK claims that consumers waste more than £700 million each year (£58 million per month or £2.1 million per day) by choosing an internet service based on speeds instead of needs. To resolve this issue O2 has revealed that it plans to launch a new range of cheaper, tailored broadband and phone packages next week.

O2's findings are based upon a study of over 2,000 consumers, which found that while the average person pays for a package of 'up to' 20Mbps per month, the vast majority of people only require an 8Mbps connection for what they use.

Felix Geyr, Head of O2 Home and Broadband, says:

"62% of broadband consumers in our survey would prefer their ISP to provide packages based around their specific needs. Therefore, our industry needs to tailor its services to people’s needs, help consumers understand exactly what they should be buying and avoid marketing based solely on speed.

It would be much more transparent if we took the same ‘a la carte’ approach offered to customers buying digital TV packages, where people can opt in to obtain more expensive services like film and sport."
When asked for their top three most frequent uses of broadband, people’s online activities largely require low bandwidth. For example:

• 77% people responded that they use broadband for emailing

• 74% for general webpage browsing

• 51% for paying bills and banking

• And 35% for Social Networking

On the other hand, services that require high bandwidth and more expensive packages are used much less frequently:

• Only 18% of people use broadband for streaming multi-media content (e.g. watching BBC iPlayer, listening to online radio)

• 5% download music and

• 3% download films
However the survey fails to recognise that natural technological evolution doesn't always cost extra. For example, a growing number of ISPs have simply replaced their 'up to' 8Mbps ( ADSL ) packages with 24Mbps ( ADSL2+ ) solutions, often at no additional cost.

usd tariff per 1 broadband megabit q1 2010

This is supported by plenty of research from analysts, such as Point Topic UK, which show that the cost per Megabit of data continues to fall; largely due to the rising headline speeds from newer technologies (Global Q1-2010 Study).

In addition, Ofcom recently reported that the average UK broadband download speed is 5.2Mbps (May 2010 data), which suggests that paying more for a faster headline rate wouldn't offer much of a benefit anyway.

Regardless of that, O2's findings neatly coincide with next week’s launch of their new broadband packages. These will be tailored to consumers’ daily consumption needs rather than headline download speeds. For example, 'The Basics' package is designed for email and general browsing users, whereas 'The Works' will be suitable for the heaviest data users who download films and play connected gaming.

O2 is also launching cheaper Home Phone line rental at £7.50 a month. The deal means broadband and home phone bundles will start at just £15.50 per month. Customers will also be able to choose from a 12 month contract or rolling 1 month contract. O2's Happiness Guarantee will continue to let customers cancel their contract for up to 30 days after joining, if they are not satisfied. Full details to follow next week.

UPDATE 10:53am

O2 hid the details of their new packages right at the bottom of the PR email and we missed it earlier this morning.

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