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O2 suggests UK wasting over £2m per day on broadband
Friday 03 September 2010 10:20:44 by Andrew Ferguson

The fact that broadband never runs as fast as the advertised headline speed of 'up to' however many 'meg' is of no great surprise to many, but based on a survey of 2,000 consumers, O2 is suggesting that the average consumer is wasting money buying a package which is faster than they need. The research shows that the average user is paying for a package faster than 8Mbps, whereas most users' requirements don't exceed this. The problem is somewhat exaggerated by providers that do not offer customers slower product options, or simply make regrading difficult or expensive. This equates to over £2m being wasted each day.

Some of the figures produced by the survey show that the common up to ~20Mbps packages cost £202.70 a year, where as the average price for an 'up to 8Mbps' package is £126.37. Of course the calculation is not as straightforward as every person needs to assess what they do with their broadband connection, however there are clearly savings to be made. Users should also be aware that in some cases, if you drop from an 'up to 16Mbps' package to an 'up to 8Mbps' one, it may revert from the ADSL2+ standard to ADSL, giving a small speed drop those currently experiencing 4 to 5Mbps throughput, or the usage allowance may not be sufficient for the user.

It may be unusual for a broadband provider to be suggesting some users would be better off on a slower package, but the survey does support the suggestion that most users simply don't use the Internet in a way which requires a super-fast connection, leaving millions of households potentially paying too much for their broadband service.

The survey found that less than a fifth of respondents used their broadband connections for streaming video:

  • 77% people responded that they use broadband for emailing
  • 74% for general webpage browsing
  • 51% for bills and banking
  • 35% for social networking
  • 18% use broadband for streaming, e.g. BBC iPlayer and online radio.
  • 5% download music and
  • 3% download films

"62% of broadband consumers in our survey would prefer their ISP to provide packages based around their specific needs. Therefore our industry needs to tailor its services to people's needs, help consumers understand exactly what they should be buying and avoid marketing based solely on speed."

Felix Geyr, Head of O2 Home and Broadband

In effect the new packages that O2 is launching next week are aiming to try and help consumers make an informed choice, with the product selling itself more on what you intend to do with your broadband, rather than focussing on the headline grabbing speed figures. One important aspect of the new packages is that customers have the option of a simple 30 day rolling contract (£29.99 connection fee, rising to £54.99 for those without an O2 mobile phone) or they can opt for a 12 month contract. As many of the larger providers are standardising 18 and 24-month contracts, the rolling monthly contract is very welcome.

  The Basics The All Rounder The Works
Ideal Use: Just for everyday surfing and email Enjoy music and catch up on your favourite TV. Perfect for smaller households. Best for movies, connected gaming and larger households
Downloads: 20GB a month Subject to FUP of 100GB a month Subject to FUP of 250GB a month
Also included: G class router N class router N class router, static IP address, Annex M uploads
Broadband + Line rental, O2 mobile customer £15.50 £19.50 £27.50
Broadband + Line rental, not O2 mobile customer £20.50 £24.50 £32.50
Broadband only, O2 customer £8.00 £12.00 £20.00
Broadband only, not on O2 £13.00 £17.00 £25.00

The fair use policy for the products can be read at http://www.o2.co.uk/broadband/policy. If you do exceed the fair use policy figures, O2 will get in touch to ask you to either upgrade or change your usage patterns. All the products are delivered using ADSL2+, although users on the top-end "The Works" package can opt for uploads speeds of up to 2.5Mbps if they live close enough to the exchange, the standard upload being up to 1.3Mbps. Static IP address is an optional extra £5 per month on The Basics and The All Rounder, but is included in the price of The Works.

O2 had some 700,000 fixed line broadband customers at the end of June 2010, so it is rapidly catching up with Orange. Factors such as the 30-day 'Happiness Guarantee' that means customers can cancel their contract (even a 12-month one) if they are not happy with the service within the first 30 days after signing up, are helping them to grow rapidly.

Update 6th September 2010: Added link to the FUP and added the 100GB and 250GB figures to the article.

Comments

Posted by CARPETBURN over 6 years ago
Ill ignore the fluffy PR speak and wait and see what their new so called "FUP" says about something they tout as "Best for movies, connected gaming and larger households".
I suspect all the new packages are going to have fixed caps otherwise they would had used the word unlimited and not the fluffy talk
Posted by nredwood over 6 years ago
NB That figure of "some 700,000 customers" includes BE as well at about 10% of the customer base
Posted by manonbus over 6 years ago
Does anyone know for certain the basis that o2 take over your telephone line - on the current packages and on the "new" packages ?

Is it a Talk-Talk and SKY ? type deal where O2 will _own_ the line (difficult then to move ISP / Phone supplier swithout doing a return to BT deal as a first step) or just a wholesale line rental type deal where moving either ISP or line rental company is easier.
Posted by c_j_ over 6 years ago
"O2's fair usage policy is quite generous from our experience"

Having a generous FUP is easy when you're still in "customer acquisition" mode and the pipes aren't full.

Once the pipes are sufficiently full that significant expansion will cost significant money, the FUP may change, whether it's O2 or anybody else.

That said, this does read like a selection of reasonable deals which could appeal to a lot of people (including me).
Posted by David-Park over 6 years ago
What about people in games and virtual worlds don't they need speed?
Also where are they on the list?
Someone being clever with the survey questions and figures pubbblished.
Posted by uniquename over 6 years ago
@manonbus
Line rental is currently Wholesale Line Rental so still a BT line for other ISPs. I don't think it is going to change.
Posted by MarkHampshire over 6 years ago
Worth bearing in mind perhaps that some people might well download more movies and do more with their connection if it were faster, e.g. we'd download more movies if the connection were fast enough and it didn't take hours to download an iTunes movie, so some peoples "light" usage is partly *because* of the speeds attainable.
Posted by uniquename over 6 years ago
@c_j_
In which case you should sign up (you don't need a MAC at the time) before the new packages are formally announced, as the existing ones are better. Except [i]The Basics[/i] might get up to 20Mbps.
Posted by uniquename over 6 years ago
@David_Park
Well the first mention in the forums about the survey was at the beginning of April. So probably the figures are now well out of date, particularly iPlayer, other TV, and radio streaming/catch-ups.

More and more people are doing that. I don't believe only 18%.
Posted by uniquename over 6 years ago
"62% of broadband consumers in our survey would prefer their ISP to provide packages based around their specific needs. Therefore our industry needs to tailor its services to people's needs, help consumers understand exactly what they should be buying and avoid marketing based solely on speed."

That's like Plusnet have been doing for years then!

Total PR-speak, and in this case hiding possible capacity issues. At least Plusnet are up-front with their traffic management details.
Posted by CARPETBURN over 6 years ago
quote".....Total PR-speak, and in this case hiding possible capacity issues...."

Yep total PR waffle, i wonder if these will vanish from their site.....
http://o2nobblingniggles.co.uk/meet-the-niggles

It seems with their new pacakage they have employed one of each LOL

As to all their percentages "74% for general webpage browsing" The other 26% i presume bought an internet service to not look at webpages :S You have to be really stupid to not spot this for what it is... wriggly PR tripe.
Posted by AndrueC over 6 years ago
@David-Park:No, online games don't need 'speed' (assuming you mean bandwidth) unless you are hosting them.

Games players need a generous usage allowance to download updates and new games but actually playing a game normally just needs low latency. That's especially true of games hosted by a dedicated server farm. They can't afford to be high bandwidth since they have to provision <number of players>*<bandwidth> for their server farm.
Posted by AndrueC over 6 years ago
(cont'd) as a general rule online games when actually being used are very network-friendly. Low and fairly consistent bandwidth. Basically a steady trickle of traffic that's easy to cater for.
Posted by AndrueC over 6 years ago
@CB:Broadly, yes, yet more PR drivel. However it's true that not everyone uses the internet to browse the web. My parents don't for one. They use it for email, to get Windows updates and to plague their offspring with requests for technical support :)

They occasionally use it to go online to buy something but not very often. They'd far rather use the Yellow pages and the telephone.
Posted by Dixinormous over 6 years ago
Yikes did Telefonica finally get tired of throwing money into the O2 Broadband pit?

Maybe those cash back deals, free months and heavy downloaders finally took their toll.
Posted by CARPETBURN over 6 years ago
^^^ Unknown until we see the new FUPs for each product though yep i expect caps. C&W re-sellers get ready for a mass of new LLU signups :D
Posted by Dixinormous over 6 years ago
I doubt O2 would be that bothered if people abandoned them and Be en masse to go cane the hell out of services on C+W resellers to be honest :)
Posted by c_j_ over 6 years ago
"the existing packages are better."

Of course they are/were. They, and all the cashback etc stuff, date from when Be/O2 were in "customer acquisition" (aka "burn money") mode.

No supplier can continue that indefinitely, eventually they have to move into "steady state" (aka "make some money" mode), and when that happens, in general you get less for your money than you did a year ago.

So I hope folks enjoyed it while it lasted.
Posted by uniquename over 6 years ago
@ c_j_
You implied earlier you may be interested in the new ones. I was pointing out that if seriously interested you ought to get in before they are in place.
Posted by otester over 6 years ago
Some prefer not to pay peanuts and get a poor service.
Posted by nredwood over 6 years ago
Despite my mention of BE above, this does not affect BE in any way ;)
Posted by otester over 6 years ago
Also the only time I know of O2 enforcing the FUP was when someone was hammering the local exchange while one of the back haul pipes was faulty meaning there wasn't much bandwidth available while they were fixing it.
Posted by CARPETBURN over 6 years ago
quote"I doubt O2 would be that bothered if people abandoned them and Be en masse to go cane the hell out of services on C+W resellers to be honest :)"

Errr
1 O2 should be bothered, losing custom equal lost revenue.
2 It doesnt affect Bethere yet so what are you blabbering about
3 Who said anyone that leaves or doesnt sign up wants to cane anything, maybe some people just appreciate honesty and not PR fluff.
Posted by timmay over 6 years ago
Even more tempted to move to Sky Broadband now.
Posted by otester over 6 years ago
@timmay

Try some of the C&W providers.

Murdochs' a ****.
Posted by chris6273 over 6 years ago
What I simply cannot understand about this claim made by O2 is that if THEY are one of the best rated ISPs for speed (Means their network has plenty of spare capacity) then THEY are the ones wasting money on Wasted Capacity?

Very silly claim.
Posted by herdwick over 6 years ago
"O2 should be bothered, losing custom equal lost revenue." - only if the revenue exceeds the marginal costs. How much do they make from a £15.50 customer ?
Posted by JohnUK over 6 years ago
Will current customers be transferred over?
Does it invalidate their current contracts?
Posted by deadman1984 over 6 years ago
people should be allowed to pick whatever isp they should not have a isp like o2 telling people what to do most people pick packages because there sometimes cheaper than having your broadband phone and tv in seperate companys example broadband through bt then your phone line throguh bt and having sky for tv
Posted by CARPETBURN over 6 years ago
quote""O2 should be bothered, losing custom equal lost revenue." - only if the revenue exceeds the marginal costs. How much do they make from a £15.50 customer ?"

Errr do you know what revenue is?
Posted by CARPETBURN over 6 years ago
Hint... Not the same as making money.
Posted by xb0xguru over 6 years ago
@otester - you should never let your personal opinion stand in the way of a good deal. Ever heard of "cutting off your nose to spite your face"?.

@CB - the percentages would be more down to how the survey was structured. You'll find it would have been a multiple item question. It's not hard to grasp - of 100 people, 77 had 'email' as one of their choices.

Just to clarify on online gaming - bandwidth has never been the real concern. We were happily playing on 56k modems. The killer is ping and lag. An inconsistent 20MBit connection is worse than a consistent 2MBit.
Posted by CARPETBURN over 6 years ago
quote"@CB - the percentages would be more down to how the survey was structured. You'll find it would have been a multiple item question. It's not hard to grasp - of 100 people, 77 had 'email' as one of their choices."

Errr... If you could select multiple choices one has to wonder what those that didnt select the following do, if they never do the below.
# 77% people responded that they use broadband for emailing
# 74% for general webpage browsing
Posted by CARPETBURN over 6 years ago
quote"Just to clarify on online gaming - bandwidth has never been the real concern. We were happily playing on 56k modems. The killer is ping and lag."

Obviously never owned a modern console where downloading hundreds of meg demos and full games is just as important as ping.
Posted by uniquename over 6 years ago
@JohnUK

No.
Posted by otester over 6 years ago
@xb0xguru

A "good deal" isn't just decided by price but value as well.
Posted by Dixinormous over 6 years ago
I didn't actually say it affected anyone, just that Telefonica wouldn't be that bothered if people paying peanuts and caning their bandwidth left to go elsewhere :)
Posted by CARPETBURN over 6 years ago
^^ Who are these people you speak of?
Posted by AndrueC over 6 years ago
@CB:I'm not sure downloading demos and games could be classed as equally important though. I suppose there might be some for whom the act of downloading is the best bit (and I've known a few games like that in my time, lol) but for most it's the actually playing that matters.

After all you can always have a DVD delivered if you don't have the bandwidth or usage allowance to download it.
Posted by tommy45 over 6 years ago
I see that the new CAPPED packages are no cheaper than the uncapped older ones, i personally would say that joining o2 broadband would not be value for money,lol
Posted by CARPETBURN over 6 years ago
AndrueC some games on PS3 require that you download game updates before you can play them, PS Home is also regularly updated, as is their Vidzone service, and thats before you even download the actual game updates.

Online gaming nowadays requires bandwidth not just ping.
Posted by trollslayer3 over 6 years ago
Figures shown in surveys are all very well but of couise it's worth mentioning that many people who download heaps of films, games, music etc from warez sites, torrents and the like are less likely to admit that fact in a survey as they'd rather keep that illegal activity to themselves... probably.
Posted by CARPETBURN over 6 years ago
Nonsense again and another example of having to download before you can play online happened today...... Version 3.42 of ps3 firmware, a forced download before you can log into psn again...... its size? Over 100Mb, and thats just for a firmware file, not game updates lol
Posted by xb0xguru over 6 years ago
@CB "Obviously never owned a modern console where downloading hundreds of meg demos and full games is just as important as ping. " I own all the consoles. Bandwidth is irrelevent in online gaming. Whether you wait 5 minutes or an hour to download the latest DLC is neither here nor there. If your ping is so bad that once you're playing it you're about a second behind anyone else and (since most Console MP games are P2P) no-one else can play when you're hosting the game. Obviously you know nothing about online gaming!
Posted by xb0xguru over 6 years ago
@CB - the update was only forced if you are not aware on how to bypass them. You can then download the update from Sony's website and update when you want to. Maybe you should learn more about the console world?
Posted by xb0xguru over 6 years ago
@otester - your comment regarding Murdoch suggests your preference has nothing to do with value and everything to do with your dislike for him. Last time I checked, Sky Broadband was excellent value for money since if you have FREE Sky Talk, you get the base Broadband package for FREE too.
Posted by xb0xguru over 6 years ago
@CB "If you could select multiple choices one has to wonder what those that didnt select the following do, if they never do the below."

It's possible that some do not check emails at home (and use their work connection and don't relate the two :) ). I dunno, I've rushed through my fair share of surveys and it's possible that a number of people either didn't correlate the two or just didn't see it. It's better than the other option which is to suggest it's a fabricated number.
Posted by CARPETBURN over 6 years ago
quote"@CB - the update was only forced if you are not aware on how to bypass them. You can then download the update from Sony's website and update when you want to. Maybe you should learn more about the console world?"

Er no maybe you should learn, whether you download it on your PC or your console you still need the bandwidth, so you didnt think that through ver well DOH. Oh and its not optional, if you want to play online you need 3.42 to log into PSN, if you bypass it with proxy or DNS tricks now your machine may be MAC banned due to the current batch of new usb mod dongles.
Posted by CARPETBURN over 6 years ago
Thats why 3.42 has hit to stop those mods working. And the proxy tricks are what those illegal modders are using, the first bans to PS3 consoles started over the weekend. I know more about the console world as you put it than you think you know
Posted by CARPETBURN over 6 years ago
As to ya check email at work suggestion, thats really grasping at straws, so at home a fair chunk still dont browse or email... What do they do stare at the pretty router lights?
Posted by CARPETBURN over 6 years ago
Oh and while we are at it firmware 3.41 was larger in size than 3.42 is, and no PS3 when store bought comes with 3.41 they all come with 3.40 or below (have to by law as 3.41 is when PSN Plus came about) and they are not allowed to included that as per their EULA without people agreeing to it. So anyone on 3.41 downloaded a bigger update than what 3.42 is in the first place anyway...... Maybe its you that needs to learn about the "console world"
Posted by CARPETBURN over 6 years ago
I imagine by your user name you are probably nothing more than a kid with a flashed 360 anyway, they are normally the ones that think they know everything about the "console world"
Go play they new gaylo and be productive
Posted by CARPETBURN over 6 years ago
^^^ That last post i take back and apologise, it was late and insulting user types of 360s in general and a certain game was uncalled for.
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