Why O2's iPhone tethering plans are a serious case of double-charging
If you want to see a service provider under fire, have a look at O2's Twitter stream of messages to customers. While the iPhone 3GS is a decent handset, the terms and conditions under which it's available are causing plenty of people's blood to boil.
We can understand why O2 won't let existing contract customers upgrade from their 3G to the new 3GS; the 3G handsets were subsidised by O2, so they'll lose out if they let people upgrade part-way through an 18 month contract.
What's bugging us is the tethering feature that'll be available on both the 3G and 3GS with the new 3.0 firmware available next week, which will allow the handset to act as a modem for a laptop. O2 are charging £14.68 per month for a 3GB allowance bolt-on, and £29.36 for a 10 GB allowance bolt-on - making it as expensive as an O2 3G dongle, and more expensive than some other service providers.
O2 are shouting about the benefits of this service, since a one month minimum term means you can cancel without consequence. It's their justification of the price that doesn't stack up, however; O2 are stating that iPhone tethering costs more as it uses a lot more data than traditional browsing on your iPhone itself.
There's already an unlimited data allowance rolled into all iPhone contracts, but of course that allowance is subject to O2's excessive usage policy. But what is that policy? The closest we could find to it was here, which suggest a limit of 1GB of data per month for the iPhone.
Given that O2 want to charge you for data you're already paying for, it's important they explain why. If tethering incurs an additional charge because it contravenes their excessive usage policy, then surely O2 need to explain that policy?
We phoned O2 Customer Services and asked where we can find the policy, and this is what we were told:
"There isn't really a policy as such. Since the excessive usage policy was brought in two years ago, it's only ever applied to a minimum number of people. There's not an actual amount, there's no limit actually set. It's there to prevent an iPhone user using their handset online constantly or downloading very big files all the time.
What happens is the systems at O2 constantly monitor accounts, and if they notice a customer using a lot of data, we'll send a text message asking them to restrict their use. If they don't, their data service might be suspended until the beginning of their billing period."
So O2's is entirely arbitrary, with no set limits; any restriction imposed by this nebulous policy seem based on intensive usage, rather than light usage that'd be perfectly adequate for occasional tethering.
In other words, abiding by O2's existing excessive usage policy as we understand it, there is no reason why customers shouldn't use the iPhone for tethering without buying the bolt-on, providing the data usage is not excessive. If 1GB of data usage is acceptable, that'd be a huge benefit to the occasional user. Indeed, the likes of Three already offer a 1GB mobile package called broadband Lite, so there's certainly is a market. The problem is that O2's excessive usage policy has no stated limits, yet every iPhone contract is subject to it without question.
For O2 to argue that tethering is more data-intensive is both a nonsense and a smokescreen; if a customer is already paying for a considerable amount of data as part of their monthly contract, what difference does it make whether it's used intensively over a few days, or gradually over one month? Selling a bolt-on above and beyond a fixed amount, say 1GB, would make real sense. That would allow customers to make use of the data they are already paying for and allowed to under O2's own terms. As it stands, unless O2 are prepared to explain themselves more thoroughly, they are guilty of double-charging a loyal customer base.