O2 has signaled its intent to cash in on its market leading position in mobile data services market, and withdrawn unlimited data bundling from its service portfolio. The move is a shock for the 3% of O2 customers whose unlimited data access became a premium service on July 12th, and its impact is likely to be monitored closely but the company’s competitors who are also keen the raise the profitability of their costly wireless data infrastructure.
O2 is widely seen as the UK’s most successful mobile data operator, having pioneered innovative all-you-can-eat deals for data services and bandwidth. These deals, and its expensive acquisition of exclusive early rights to market Apple’s iPhone in the UK, have been rewarded with a leading market share of mobile data users. Now though, O2 has clearly decided that market share is no longer a priority, and has decided to raise user revenues by encouraging high-end customers to adopt higher quality metered services.
Other wireless operators will be monitoring customer responses to O2′s move closely. With mobile applications such as satnav consuming ever more data capacity, all wireless operators are under pressure to maximize the return from their expensive and finite radio spectrum. Most would like to follow O2’s lead and phase out all-you-can-eat deals, but may hesitate to do so if O2’s decision drives customers away.
