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Could this be the end of 'unlimited' data plans?

Analysts expect competitors to follow O2's lead

Other mobile networks could follow O2 and scrap 'unlimited' data allowances for mobile phone users, according to analysts.

The move came to light yesterday, after O2 revealed its new tariffs for smartphones, including Apple's iPhone 4, which was unveiled by Steve Jobs this week at the company's Worldwide Developers Conference (WWDC).

The new tariffs, which are available as either 18- or 24-month contracts, are priced from £25 and come with call bundles of between 100 and unlimited minutes, as well as unlimited texting.

However, the network has also chosen to cap its formerly 'unlimited' data offering.

Users paying between £25 and £35 per month on a 24-month contract or between £30 and £40 per month on an 18-month contract have a data allowance of 500MB per month.

Those whose tariffs offer 900 or 1200 minutes per month will find their data is capped at 750MB, while those on the 'unlimited' monthly contract have a 1GB data allowance.

"O2 had become the industry poster-child of the capacity crunch era," Thomas Wehmeier, principal analyst at Informa Telecoms and Media, said.

"There's a lot of talk about the hunger for data of iPhone users, but our analysis shows that the majority of users will be comfortably served by 500MB of data per month.

Ben Wood from CCS Insight told the BBC O2 had become a "victim of its own success".

"O2 has had so many people sign up for data intensive phones, like the iPhone. Huge amounts of data are consumed by the minority of people."

O2, which has 21 million customers, said just three percent of its users will be forced to pay for additional data following the cap.

"That three percent are using something like 36 percent of the data capacity of O2's network. If O2 get it right, everybody will get a better service," Wood said.

However he said it was "a dangerous game to play, if that top three percent of users go to another network".

Wood said that he expected other mobile networks to follow O2's lead, and Wehmeier agreed.

"Differentiating based on usage volume is just the start, as operators dip their toes further into experimenting with new data pricing models."

See also: O2 unveils iPhone 4 early upgrade offer


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