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O2 AXES ALL-YOU-CAN-EAT DATA PLAN

June 15th, 2010

Mobile operator O2 is moving to axe “all-you-can-eat” data plans, which enable smartphone customers unlimited Web browsing for a fixed-fee, prompted by network overloads associated with the bandwidth-hungry phones. The Telefonica-owned (TEF.MC) operator said it expects only three percent of its 21.4 million customers to have to pay for breaching data usage caps, most of whom are expected to be iPhone users.

In a similar move, Vodafone (VOD.L) has also cancelled unlimited data plans but analysts say its arrangements were not as severe as O2’s. Ronan Dunne, head of O2, said data caps would enable the firm to increase investments in faster networks and denied there could be a backlash, saying investment in infrastructure “has to be a great thing for customers”.

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