02 says it will dump iPhone usage limits

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Stung by the backlash of criticism after announcing what many considered a punishing tariff for the Apple iPhone in the UK, 02, the exclusive carrier, is busy back-pedalling on the issue. It’s previous tariff for the iPhone was described as “unlimited” at the launch until everyone realised it was actually capped at 200MB. A story on the Daily Telegraph now reveals that O2 will scrap plans to cap web usage on the Apple iPhone when it launches on Friday. CEO Matthew Key said ”customers find ‘unlimited with limits’ confusing.” But it may also be the case that 02 realised that they were not going to get away with the initial pitch, especially with customers paying £269 for the handset, in a market where most handsets are free/subsidised, as well as a tariff from £35 to £55 which could run into over £1,500 a year.

02’s PR people are working overtime today, releasing a statement from Sally Cowdry, O2 UK’s marketing director, who said O2 will stick to their unlimited mobile data services plan (together with The Cloud’s public Wi-Fi network), but they will be dropping the planned fair use policy:

“a fair use policy was set in place at an amount that’s miles beyond expected average use. This policy was intended to prevent commercial exploitation or using the iPhone as a modem, both of which would put everyone else’s experience at risk. We now appreciate that having set limits as part of the fair use policy conflicted with our objective of encouraging internet usage on the iPhone. People don’t speak in megabites and customer feedback has been that if we say unlimited, it should be unlimited.”

However, right now the iPhone tariff section on the O2 site still says “fair usage policy applies.” Perhaps they had better make up their mind.

  • http://www.business-sale.com Chris

    Well they can’t make their mind up about business iPhone purchases either. On calling O2 3 weeks ago, they assured me we could access the iPhone tariff as a business.
    However today, they confirmed (I spoke to two reps plus the PR department) that they did not have an iPhone tariff for businesses, therefore there is no way my company nor any other company can buy an iPhone, unless the purchase was transacted by an individual. That individual could then rebill his/her company.

    Big Deal! That means a lot of extra hassle for the company and the employee; it also means the company cannot reclaim the vat ofn the handset nor billing for the 18 months.

    How on earth do they think they can compete with Blackberries in the corporate workspace?

  • http://www.radio-edit.co.uk Duncan

    I’ve got an N95 on O2 with an ‘unlimited’ data bolt-on. Will this change in policy apply to my bolt-on, too, or is it just for the ridiculously wealthy that can afford an iphone?

  • http://www.tcvuk.com Iain Henderson

    I think that O2 have missed a big opportunity with the iPhone. See blog link below which covers how the customer experience is poorly designed and that in some cases existing, long term O2 customers will lose out financially if they buy an iPhone.


  • http://tioti.com paulpod

    Phew, that’s good news – I was fearing some ‘unlimited’ pain, as I suffered at the hands of 3G Vodafone. 650 notes for a couple of days using a datacard in Germany? No thanks! (mostly re-credited, and “unlimited” limit now 3GB which is more like it)

  • http://oskarlissheimboethius.com Oskar L-B

    “How on earth do they think they can compete with Blackberries in the corporate workspace?”

    I don’t know if that’s really what’s keeping Steve Jobs awake at night. They seem to sell all the iPhones they can make as soon as they make them even without some business-buyers joining in.

    My guess is that the corporate marketing will become more visible when Salesforce.com releases the iPhone-version of their apps.

  • http://www.barnesdmd.co.uk Duncan

    Hopefully the other UK carriers will follow suite and either be upfront about their charges or drop the limit (wishful thinking I know) on other plans and phones.

  • http://dreamchaser.go4i.net/ Vinay

    Waiting for iPhone Contest :) !! When is it coming here ;) ?

  • http://www.scribblesheet.co.uk JohnofScribbleSheet

    At least they tracked back, im surprised they had the audacity to cap data limits.

    ”customers find ‘unlimited with limits’ confusing.”

    I wonder why?

  • http://www.digital-era.org/blog/?p=803 digital-era » Blog Archive » Θα αλλάξω τα σχέδια μου για το iPhone (γιατί με πήρατε χαμπάρι)

    […] Το έμαθα από το Tech Cruch […]

  • http://www.radio-edit.co.uk Duncan

    So I did my own research, and O2 say “The unlimited data option in our iPhone tariffs is only applicable to our iPhone tariffs and not to all data Bolt Ons.”

    What a load of rubbish. Why don’t regular O2 customers get treated like the iPhone ones?

  • Daniel Waters

    It’s O2 — not 02. :(

    Is it only me that finds usage of ’02’ massively annoying? Probably.

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