O2 sweetens service plans for UK iPhone customers

[AppleInsider]

In an effort to spur more sales of Apple's iPhone while simplifying its pricing structures, European wireless provider O2 announced Tuesday a 'radical shake-up' of its monthly tariffs that will see most of its iPhone customers awarded with three times as many wireless minutes without a fare increase.

Beginning February 1st, iPhone customers on a £35 per month contract will
get 600 minutes instead of 200 and "more than double" the plan's current 200 text message allotment. Meanwhile, the £45 per month plan will see its offerings upgraded to those of the existing £55 package, which includes 1200 minutes and 500 text messages.

As a result, O2 said it plans to completely dissolve its existing £55 plan, replacing it with a "super-tier" £75 offering that will include 3000 minutes and 500 text messages per month. The £269 cost of the iPhone, as well as the 18-month contract requirement will remain unchanged.

Customers who were on the £55 tariff will have the option to either save £10 per month or take the new £75 tariff. O2 said it plans to transition all its iPhone customers to the new tariffs in February, allowing them to benefit from the rate reductions by mid-March.

Thus far, sales of the iPhone in the UK -- like that of Germany and France -- have underperformed. According to a published report earlier this month, O2 managed to sell 190,000 of the touch-screen handsets in the two months following its launch on November 9th. That figure, however, is said to have fallen short of a "conservative" 200,000 internal unit estimate by the carrier.

While O2 has not published any official figures on iPhone sales, it did say the device has help triple its retail store traffic. The spike is believed to have provided a surge in the carrier's sales for the end of 2007 regardless of how many customers eventually chose the iPhone over an alternative.



O2 is expected to capitalize on the revised iPhone plans beginning next month, as the rate reductions are likely to finally sway some fence sitters towards the Apple handheld.

[ View this article at AppleInsider.com ]

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[unclepezza]

Certainly a move in the right direction, I already have the £35 a month tarrif, and my bill hasn't exceeded this amount yet, but I'm not a heavy user of my private mobile, my corporate blackberry, well that's another story.

I'm not going to save any money just get more minutes/txts included, not a bad thing, but more frequent users are going to see the real benefit here. Should help with sales, this is the first move, but I suspect not the last as the £269 price of the handset is still going to be the main sticking point as it's an up front charge, that can't be disguised.

Well done o2, but don't stop there!

[kkqc9934]

The Phone sales are poor because the Iphone is great MP3 player with a disappointing phone attached. In order to bring this into focus did anyone notice that during the Jobs keynote he mentioned the 'new function' to allow iphone users to send SMS to multiple recipients. I am sure I have been able to do that with a variety of phones since the last century!

[Phizz]

This is great news. I shall be definitely purchasing an iPhone now. Before it was too much of a hit to take on the tariff compared to my existing one, now it is much more balanced (especially considering the unlimited data).

Likely I am not the only one - sales should definitely pick up now.

[powderdust]

The cynic in me suggests that this is Apple/O2 clearing the backrooms full of iPhone stock. Having said that, they are making room for the next iPhone for sure.

[astromac]

What does "over 400" txt messages mean????

[shall22]

This makes a huge difference. The UK tariffs really weren't competitive in the British market. They weren't even competitive against O2's own rates on other phones (for example, you can get 1200 mins and 1000 texts for £35/month in one deal!). All in all, it was putting off a large number of people who otherwise wanted the iPhone.

The initial AT&T rate in the US was noticeably better value, too.

O2 have obviously done enough research to come to the same conclusion. Shame they didn't launch on the better deal when the publicity was at its height.

[shall22]

Originally Posted by astromac

What does "over 400" txt messages mean????

500. It's on the website, if not in the press release.

[aross99]

Very impressive to see a Cell phone company ANYWHERE make this kind of a change!

[solipsism]

Originally Posted by astromac

What does "over 400" txt messages mean????

That is what I was wondering. Because unlimited is "over 400".

[t.lo]

Originally Posted by shall22

This makes a huge difference. The UK tariffs really weren't competitive in the British market. They weren't even competitive against O2's own rates on other phones (for example, you can get 1200 mins and 1000 texts for £35/month in one deal!). All in all, it was putting off a large number of people who otherwise wanted the iPhone.

The initial AT&T rate in the US was noticeably better value, too.

O2 have obviously done enough research to come to the same conclusion. Shame they didn't launch on the better deal when the publicity was at its height.

This is true for T-Mobile in Germany, too. The iPhone rates are terribly expensive. The basic rate of 50 € (which translates to £37) gives you a measly 100 minutes and 40 SMS! The new O2 tariff gives you SIX TIMES MORE minutes and more than TEN TIMES MORE SMS for roughly THE SAME PRICE! This is completely insane! No wonder they're not selling any iPhones here!

[I am a human]

I can't help thinking that this is only going to change the minds of a small percentage of potential iPhone / O2 customers. I think some kind of subsidy on the handset would have been much more effective in enticing folks to part with their money.

[Jemster]

*sigh* oh well, so us low-usage people who would've been quite happy with the previous 200 mins / 200 txt quantities for a more reasonable price still can't get an iPhone.

I'd have thought they could've reduced the lowest entry point to £25 / month for the 200/200 plan instead of wiping it out entirely. That would have changed my recent upgrade for sure.

[mono]

Originally Posted by I am a human

I can't help thinking that this is only going to change the minds of a small percentage of potential iPhone / O2 customers. I think some kind of subsidy on the handset would have been much more effective in enticing folks to part with their money.

Well, I have no issue now with the price. But why the 18 month contact? Get it to 12 months and you have a deal O2. I'd only accept an 18 month contact for a MASSIVE subsidy on the handset cost.

[Oliver J. Taylor]

This is a great change to the price plans by O2 and definitely makes purchasing an iPhone more attractive. I can't help but thinking however that they should introduce a cheaper plan, say £25 as £35 a month is expensive and includes far too many minutes and texts than some people need. Maybe they should have changed their old £35 price plan to £25 and simply introduced the new £35 plan....

[Walter Slocombe]

This makes holding out for 16GB even harder! DAMN YOU O2/APPLE!1!

[mrochester]

The cynic in me sees this as proof that the iPhone is selling very poorly in the UK. I've never seen any network over double the number of inclusive minutes and texts. I think this is a great start to get iPhone sales moving, but I think if they really want to get things heated up, they need to tackle the steep asking price. But one step at a time I guess. If sales don't pick up very much from this sweetener, then I think the next step is to reduce the price.

[hdasmith]

I couldn't care if it means that iPhone sales are poor in the UK, my phone keeps getting better without me spending more than I planned! I'm very happy, and am sure I can use up the rest of the minutes.

[shall22]

Originally Posted by I am a human

I can't help thinking that this is only going to change the minds of a small percentage of potential iPhone / O2 customers. I think some kind of subsidy on the handset would have been much more effective in enticing folks to part with their money.

On the contrary, I do think it'll make a difference. I know any number of people who really, really wanted an iPhone... until they compared the tariff with their current contract...

Re the subsidy: I know it's difficult in a market where free phones are the norm, but Apple have to re-establish a sense of value, of worth, to the market - because the iPhone is positioned at the top end of the iPod range, and therefore cannot be cheaper than any iPod.

[mrochester]

0

Originally Posted by hdasmith

I couldn't care if it means that iPhone sales are poor in the UK, my phone keeps getting better without me spending more than I planned! I'm very happy, and am sure I can use up the rest of the minutes.

Yeah it's a nice surprise for those of you who were already happy with the allowance you received. But O2 aren't doing this to please their existing customers, they are doing this to attract new customers. Kudos for them for finally getting the message!

[Hattig]

Well this will make this autumn's phone replacement interesting won't it! By then there will be a 3G iPhone with 16GB for the same price if we're lucky. Also the OS will be far more mature, and there will be a thriving official third-party application scene.

The old prices were poor for what you got, although the free wireless with The Cloud was a nice touch.

Now the number of minutes and texts seems quite reasonable. Shame is, I would have preferred a £25 tariff with 200 minutes / 200 texts, but O2 know that they can get £180 more over the contract from people who won't use the extra capacity. £630 + £299 ... hmm.

[SpinDrift]

Woohoo! Happy time!

Now if only they allowed free international roaming in countries that support the iPhone (US, UK, France and Germany etc) So for example if a UK iPhone user goes to the US it automatically switches to ATT and calls and data come out of your standard tariff.

[TBaggins]

Originally Posted by AppleInsider

Thus far, sales of the iPhone in the UK -- like that of Germany and France -- have underperformed.

Yup, as I've said all along.

Still, these plan tariff changes are exactly what the doctor ordered, and show that Apple and O2 can be aggressive and change course when its obvious that 'Plan A' was not working out as well as hoped.

This is the 'one' in the one-two punch they need in Europe, the other obviously being a 3G- and MMS-capable iPhone... hopefully by summer, fall at the latest.

This should help quite a bit.

.

[TenoBell]

The Phone sales are poor because the Iphone is great MP3 player with a disappointing phone attached. In order to bring this into focus did anyone notice that during the Jobs keynote he mentioned the 'new function' to allow iphone users to send SMS to multiple recipients. I am sure I have been able to do that with a variety of phones since the last century!

Apple has always maintained that more functionality will come to the phone over time. Apple is more interested in functionality being easy and intuitive over a long feature list. While sending multiple SMS is common on every phone, its not something that is necessarily easy to use on every phone. Something that is difficult to use is worthless.

The cynic in me suggests that this is Apple/O2 clearing the backrooms full of iPhone stock. Having said that, they are making room for the next iPhone for sure.

It doesn't mean this at all. The UK tariff was a terrible deal and needed to be adjusted. This is what it should have been from the beginning.

I think this is a great start to get iPhone sales moving, but I think if they really want to get things heated up, they need to tackle the steep asking price.

The asking price isn't out of line with other phones of its class.

Well, I have no issue now with the price. But why the 18 month contact?

18 months is nothing. After the 18 months you can take the phone to other carrier options. In the US we have 24 months and only one other carrier option.

[TBaggins]

Originally Posted by TenoBell

Something that is difficult to use is worthless.

You mean like MMS? Except that MMS is not at all difficult to use, the Euros (and others) have been asking for it, and the iPhone still does not have it, even after 7 months.

The UK tariff was a terrible deal and needed to be adjusted. This is what it should have been from the beginning.

I completely agree.

The asking price isn't out of line with other phones of its class.

I'd like to hear what the Euro posters think on that one.

18 months is nothing. After the 18 months you can take the phone to other carrier options. In the US we have 24 months and only one other carrier option.

True.


.

[TenoBell]

Yup, as I've said all along.

Well there are a couple of ways to look at that.

German T-Mobile has reported that new subscribers were up 14.5% this quarter over last year. It attributes this boost to attention it gained from the iPhone. For them it doesn't matter if people got an iPhone or not just as long as they signed a contract with T-Mobile.

[cameronj]

Originally Posted by kkqc9934

TIn order to bring this into focus did anyone notice that during the Jobs keynote he mentioned the 'new function' to allow iphone users to send SMS to multiple recipients. I am sure I have been able to do that with a variety of phones since the last century!

Thank you captain-last-month. I'm sure nobody noticed that one, except the hundreds of people who talked about it.

[StuBeck]

Originally Posted by TenoBell

Apple has always maintained that more functionality will come to the phone over time. Apple is more interested in functionality being easy and intuitive over a long feature list. While sending multiple SMS is common on every phone, its not something that is necessarily easy to use on every phone. Something that is difficult to use is worthless.

It doesn't mean this at all. The UK tariff was a terrible deal and needed to be adjusted. This is what it should have been from the beginning.

18 months is nothing. After the 18 months you can take the phone to other carrier options. In the US we have 24 months and only one other carrier option.

Not having multiple SMS was a disaster to begin with. Even if its hard to use on other phones (it isn't though) not having it doesn't make sense. Typing in the same message 5 times is more difficult then using any menu system.

You have multiple carriers in the US, Tmobile and AT&T to start with. You still have to unlock the iphone here in the UK, and if you agree with what Apple has been saying, that'll brick it.

[solipsism]

Originally Posted by cameronj

Thank you captain-last-month. I'm sure nobody noticed that one, except the hundreds of people who talked about it.

Be nice! That was his first post. He probably isn't as fanatical about getting up to date everything that comes out of Cupertino or linger around these parts much based on that first post.

PS: Captain-last-month is pretty funny.

[TenoBell]

Not having multiple SMS was a disaster to begin with

I suppose that depend on how important it is to you. You wouldn't be able to send out hundreds of those annoying "Merry Christmas" or "Happy New Year" messages.

Even if its hard to use on other phones (it isn't though) not having it doesn't make sense.

In my previous Samsung phone to send multiple SMS. You had to go into the submenu of a submenu. Then go to the address book and scroll through to find each person you wanted to send the message to. It was such an arduous process it wasn't even worth bothering with.

You have multiple carriers in the US, Tmobile and AT&T to start with.

ATT and T-Mobile are the only two GSM carriers. Verizon and Sprint are CDMA which does not work with the iPhone.

You still have to unlock the iphone here in the UK, and if you agree with what Apple has been saying, that'll brick it.

No this is totally wrong. Phones were never bricked from simply being unlocked. Phones that were hacked could have been bricked if the user attempted to update the firmware. The latest firmware update 1.1.3 actually unbricks those same phones.

[CaptObvious]

I've had multiple SMS support on every phone I've ever had and I've never once used it.

[solipsism]

Originally Posted by CaptObvious

I've had multiple SMS support on every phone I've ever had and I've never once used it.

You're missing the point! The point is to look for what something doesn't have and then bitch about it endlessly. If it is ever added then your supposed to bitch that it wasn't added sooner while looking for something else to bitch about. But you are to never, under any circumstance, to talk highly about any features it does have.


PS: Not that it's any consolation to anyone here, but the iPhone can receive MMS via AT&T's website. AT&T sends an SMS with a username and password.

PPS: It's just an FYI in case it wasn't known, I'm not in any way defending the lack of MMS.

[OllyW]

Originally Posted by CaptObvious

I've had multiple SMS support on every phone I've ever had and I've never once used it.

Is that because you've only got one friend?

[TBaggins]

Originally Posted by TenoBell

Well there are a couple of ways to look at that.

German T-Mobile has reported that new subscribers were up 14.5% this quarter over last year. It attributes this boost to attention it gained from the iPhone. For them it doesn't matter if people got an iPhone or not just as long as they signed a contract with T-Mobile.

For German T-Mobile, it doesn't matter. For Apple, it does.

Apple doesn't get a cut of revenue from new subscribers who don't purchase iPhones. And German iPhone sales have been weak.

Again, I called the Euro situation pretty well, though I think a lot of our Euro posters did as well (like Aegis).

.

[TBaggins]

Originally Posted by TenoBell

ATT and T-Mobile are the only two GSM carriers. Verizon and Sprint are CDMA which does not work with the iPhone.

Not precisely... there are likely still some tiny independent regionals out there using GSM, but the ones of any real size (Suncom, Dobson) have been acquired by either ATT or T-Mobile.

The only large regionals left unacquired are all CDMA (Alltel, USCC, Metro, Cricket).

.

[TenoBell]

For German T-Mobile, it doesn't matter. For Apple, it does. Apple doesn't get a cut of revenue from new subscribers who don't purchase iPhones. And German iPhone sales have been weak.

Well we have to look at it in its full context. The Euro market is a mature market with many advanced smartphones. Many of these phones are given free with 18 month tariffs. The iPhone was sold at a premium with a higher tariff than most phones.

At a premium the iPhone sold 330,000 units over 11 weeks in UK/Germany and 5 weeks in France. From what we've seen of other phones sales this number is not significantly less than other phones which are available in every Euro country from every mobile carrier.

By function the iPhone is not hampered by 3G in reality if at all only by hype. O2 reports by percentage iPhone use more data than all other smartphones combined.

Sales could have been better if the tariff hadn't been so off. O2, T-Mobile, and Orange are all happy that they grew over the past quarter whether directly because of the iPhone or not. Apple is happy as this past quarter was its best quarter in history.

Not precisely... there are likely still some tiny independent regionals out there using GSM, but the ones of any real size (Suncom, Dobson) have been acquired by either ATT or T-Mobile.

I'm talking about the major carriers. There is little chance anyone is moving their iPhone to a tiny regional carrier.

[mrochester]

By function the iPhone is not hampered by 3G in reality if at all only by hype. O2 reports by percentage iPhone use more data than all other smartphones combined.

This is a no brainer really. There is no option to take an iPhone on O2 without a data plan, so it figures that data usage for the iPhone is going to be a lot more than other phones where users have a choice to take a data package or not.

Incidently, I turned the wifi off on a demo iPhone in an O2 shop last week and tried browsing. It was horrendously slow, far slower than the HSDPA connection I get on my N95-8GB. If that is what edge is like, I say no thanks, and call anyone who says it is as fast as HSDPA a dirty stinking liar :P.

[TenoBell]

This is a no brainer really. There is no option to take an iPhone on O2 without a data plan, so it figures that data usage for the iPhone is going to be a lot more than other phones where users have a choice to take a data package or not.

Just because you have it does not mean you have to use it. I rarely used much of the features on my previous phones because they were so difficult to use.

If that is what edge is like, I say no thanks, and call anyone who says it is as fast as HSDPA a dirty stinking liar.

Who has said that?

Most of the time you are using the iPhone will be on EDGE and not on WiFi. EDGE is good enough for mobile safari to have a marketshare short of desktop browsers. Results vary depending on your wireless strength. Testing has shown that the rendering speed of mobile safari helps make up for EDGE slower speed.

[mrochester]

Just because you have it does not mean you have to use it. I rarely used much of the features on my previous phones because they were so difficult to use.

And I think people are more inclined to make use of it, not because they necessarilly want to, but are paying for it anyway so might as well do so. The Google maps application would munch through a lot of data and I'm pretty sure that people are likely to be playing with these features.

Who has said that?

Most of the time you are using the iPhone will be on EDGE and not on WiFi. EDGE is good enough for mobile safari to have a marketshare short of desktop browsers. Results vary depending on your wireless strength. Testing has shown that the rendering speed of mobile safari helps make up for EDGE slower speed.

I've seen it loads of times in mobile forums. I live in a major city, so I can't believe for a second that the edge signal is anything short of perfect in the centre of town. The rendering speed might make up for edge in comparison to other edge and basic 3G phones, but certainly can't come anywhere near to an HSDPA enabled device (in my experience).

[cameronj]

Originally Posted by TBaggins

For German T-Mobile, it doesn't matter. For Apple, it does.

Apple doesn't get a cut of revenue from new subscribers who don't purchase iPhones. And German iPhone sales have been weak.
.

Sure apple gets a cut - they get the cut from China mobile and from all the other future deals they sign which reflect the strong foot traffic generated.