O2 cuts data-roaming rates

O2 has significantly cut its data-roaming prices within Europe.

On Monday the Telefónica group, which owns O2, announced that its customers in the UK, Ireland, Spain, Germany and the Czech Republic would see cuts in excess of 40 percent when using their phones for emailing or surfing the web in other European countries. For UK customers, the cuts range from 57-80 per cent.

The cuts are not dependent on opting into a bundled tariff — a tactic employed by operators until now — but will affect every customer, whether on a pre-pay deal or a contract. The cuts will come into force by July 2008 — "before the summer holiday season" — a spokesperson for O2 told ZDNet.co.uk on Monday.

For contract customers, O2's previous tariff per megabyte of data was between £6 and £7.05, depending on the country being visited. Prepay customers were paying as much as £15 per megabyte. Both groups will now be charged just £3 per megabyte. Those opting for a data bundle will still get a better deal, at a monthly charge of £35 for 50MB of data usage.

The charge for text messaging while roaming in Europe has also been cut for prepay customers, from 49p per message to 25p. The same charge is levied on contract customers, although only when their standard SMS bundles, which can be used when roaming, are used up.

The European Commission, which last year scored a victory over operators when it forced them to cut their voice charges for roaming customers, had warned in July that data and SMS roaming would be next.

"This initiative follows similar innovation by Telefónica in voice roaming, with the introduction last year of our highly successful My Europe roaming price plans — the first to completely remove charges for receiving calls abroad," said Matthew Key, chairman and chief executive of Telefónica O2 Europe, on Monday. "Today's announcement honours the promise we made to customers at that time that, having reduced the cost of calling whilst abroad, we would bring down the last barrier in roaming charges — data."

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"Importantly, it also addresses the issue of transparency where, for too long, customers have been confused by a plethora of tariffs and fees," added Key. "The published rate will apply across the board — regardless of the mobile network used."

Without taking into account the various bundle options offered by operators, O2 had already been the cheapest option for roaming customers. Its rivals had charged as much as £10 per megabyte.

A spokesperson for Vodafone claimed on Monday that customers did not want to be charged by the megabyte. Vodafone takes a different approach, charging a flat rate of €12 (£9) per day regardless of how much data is used, but only to those opting into a special monthly tariff.

"Our research suggests that customers are confused by per-megabyte charges," said Vodafone's spokesperson. "[O2's new rates] won't necessarily be cheaper — it depends on how much data you send per day."

Meanwhile, a T-Mobile spokesperson said the operator had no plans to follow O2's lead. "As an alternative, we have 31,000 Wi-Fi hotspots around the world," said the spokesperson. "This provides a fairly cost-effective service for people who need to connect to the internet".

Neither the European Commission nor the operator Orange could offer any comment on Telefónica's cuts at the time of writing.