O2 sweetens service plans for UK iPhone customers
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.
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.
Comments
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!
Likely I am not the only one - sales should definitely pick up now.
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.
What does "over 400" txt messages mean????
500. It's on the website, if not in the press release.
What does "over 400" txt messages mean????
That is what I was wondering. Because unlimited is "over 400".
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'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.
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.
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.
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!
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.