Phone companies are turning in to the new banks… the web continues to make stuff free and that’s bad if you’re a phone company. Phone calls & texts as we know them will soon be a thing of the past. Data transfer / mobile broadband is where the future is at for phone companies. We know that and they know that…
What a difference a year makes.
o2 & their management are smart people. They’ve reduced data allowance on their cheapest bill pay package from 2GB to 150mb. That’s right, reduced it by 92%. Why? Because only heavy users use more than 150mb according to o2. I signed up with O2 bill pay last October to get the iPhone 4. I was happy with the package i was on, still am. If you sign up today, however, you may not be so happy and i’ve designed this ‘story’ to highlight what O2 won’t – despite the fact they KNOW more and more people are using smartphones and we’re transferring more data than ever before, they’ve CUT data allowance by 92% from what it was this time last year on their cheapest package… (click to enlarge)…
Telfonica, o2 Ireland’s parent company released a report earlier this year which said (in relation to o2 Ireland) that “Non-SMS data revenues rose more than 15% year on year in the first half to account for 40% of data revenues – driven by an increasing demand for smartphones.”
Shock horror. They acknowledge the fact there is an ‘increasing demand’ (their words, not mine) for smartphones and data usage. They see data revenue is on the rise. What do they do? Cut data caps by 92% in order to force people to pay extra for more data allowance, because they know that’s where the future is.
Make no mistake about it, this is purely a financial decision and o2 have basically admitted it. Find what’s profitable, make it more profitable. Makes sense if your an o2 fat cat, doesn’t make sense to people on the street when they see data allowance cut by 92% and expect them to pay the same price as before.
What the hell are they thinking?
This ‘story’ first caught my eye on boards.ie when somebody mentioned it. There are plenty of long term, loyal o2 customers jumping ship there. Plenty of people are trash talking O2 and despite the fact O2 have an official presence on boards.ie, they’re remaining largely silent which is inexcusable… What kind of company allows customers to post publicly that they’re switching networks and says nothing? Does nothing? Do they not realise how bad that looks to potential customers browsing for a new phone or plan?
It’s the same story on this thejournal.ie article. Dozens of furious o2 customers. Regardless of whether they’re upgrading or not (in fact you can still stick with your old plan but upgrade phones on o2), these price changes still need to be highlighted and o2 need to be avoided if they think that they can introduce massive changes like this and get away with it. I felt a blog post wasn’t enough… i had to go further and keep it simple for people. This needs more attention.
The funny thing is, i’m an O2 customer and these changes don’t effect me. I’ve another 5 months or so to go on my contract, but i’m *happy* with their service thus far. However, i’ve switched from them before and i’ll do it again when that contract is up if there’s a better deal elsewhere, particularly in relation to data.
Any phone company that reduces data allowance by such a huge amount and expects everyone to be ok with it, isn’t a company i can trust. On the one hand, they’re acknowledging data /mobile web is the future, on the other they’re saying “you’re gonna pay us just as much as you always did, if not more” for that data. It’s a tough one for them as a business… but as a customer i don’t care and they’re doing something wrong if existing customers are spending hours in photoshop highlighting their flaws.