O2 becomes new kid on the broadband block

Chris Frost, communications expert at independent comparison and switching service uSwitch.com, comments on the long-awaited arrival of O2 Broadband, announced today:

“It’s been a long time coming but the package announced today comes close to ticking all the boxes in terms of what customers want from a broadband service.

“With packages starting at £7.50 per month (excluding line rental costs which are approximately £10.50 a month depending on the provider) for up to 8 Meg broadband and free extras such as McAfee Security and a wireless router are likely to put a smile on the faces of many of the loyal 18 million O2 customers that will be initially targeted with this offer.

“O2 has entered the broadband market with a bang. It has already identified a unique selling point with its ‘speed guarantee’. Any customers that sign up to a broadband speed that cannot be delivered will receive an email from O2 recommending that they downgrade their package. By taking this stance O2 is tackling head on the number one issue currently affecting consumer confidence in the broadband industry – our research shows that 4.65 million broadband customers are unaware of the broadband speed they are receiving.

“Following its strategic acquisition of Be, O2 broadband will be available to 50% of the population, so potentially a large chunk of its mobile customers may not be able to benefit from the new deal straightaway. It is our hope that O2 will announce further roll-out of the service in the not-too-distant future.

“O2 appears to be pushing value rather than price, possibly learning from the experiences of providers such as Orange and TalkTalk that launched ‘free’ broadband last year but are now struggling in the customer satisfaction polls. However, the take-up from non-O2 customers is likely to be low – with packages starting at £17.95 for up to 8 Meg, they could be better off taking the same service directly from Be at £14 a month.

“More welcome news is that customers will not be charged for technical support. 19 million calls were made to technical support helplines over the last year at a cost of £31 million, so this move is another example of O2 taking the moral high ground.”

Frost concludes: “O2 has spent a long time doing its homework in a bid to produce a service that closely matches the needs of its existing mobile customers. If it can successfully deliver on its promises, this new kid on the block could soon become a major threat to the established broadband barons.”