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O2’s new broadband offering reviewed

Mobile operator O2 UK has announced it will launch its new broadband offering on October 15.

The service is to be offered through 3 different plans, with download speeds of up to 8, 16 and 20Mbps.  O2 bought out LLU broadband operator “Be”, in preparation to offer its own broadband service.  It currently covers around 50% of the UK population.

The service is available to O2 and non-O2 customers. Non-O2 customers pay £10 on top of the montly price.

O2 says it is promising to make broadband better by addressing issues that have left consumers dissatisfied with their service.  This includes performing a line check prior to purchase to estimate the download speeds the customer can receive to ensure they are placed on the correct package.

O2 Broadband Price Plans are shown below.  Non-O2 customers should add £10 on top of the montly price.

* O2 Mobile customers only 

Matthew Key, CEO, O2 UK said, “O2 Broadband intends to shake up the market and be a breath of fresh air by offering a technologically-advanced service which also meets customer demand for a simple set up, receiving what you pay for with no broken promises.”

Taking a closer look at the prices and the packages on offer, there isn’t anything revolutionary here, but the prices are reasonable.  If you can get it, or for that matter need that much speed, the Premium and Ultimate products look good value, even for non-02 customers.

However, competition is stiff between the large providers and there are plenty of broadband offers to choose from.

For example, Sky’s highest speed service is up to 16Mbps, and costs an extra £10 per month on top of a TV package.  Sky’s coverage is around 70% percent, which is significantly more than 02.  Talk Talk can offer broadband with a phoneline for £16.39 per month.

O2 probably hopes to distinguish themselves from the crowd by offering a reliable product with a good level of customer service.  But even major providers have started to improve their customer service levels.

To confuse matters, the highest speed product, Ultimate, offers up to 20 Mbps.  For non-02 customers this works out at £25 per month.  Be broadband have a similar offering of up to 24Mbps for £24 per month.

Jonathan Coham, analyst at Ovum, also isn’t convinced.  He commented, “We believe O2 will struggle to establish itself as a major player in the fixed broadband space, let alone reach its 1 million subscriber target in 2010. Following a statement back in August, O2’s plans to limit the service to unbundled areas (the only major operator to do this) suggested its broadband offerings would be innovative, competitively priced and a “breath of fresh air” in the market. Unfortunately we see O2 offerings as being anything but, which combined with the limited footprint, really does hinder O2’s position in the broadband, mid- to long-term.”

O2 broadband packages will shortly be added to SeekBroadband’s price comparison service to enable consumers to compare it to other similar broadband services.