O2 adds colour to the German LTE market

Steven Hartley, telco strategy analyst, Ovum

SPAIN: O2 is set to launch new tariffs for its German LTE smartphone customers from March 1, 2013. These follow the current pattern for unlimited voice and messaging, showing the increasing importance of data to the mobile proposition.

O2’s pricing is good value compared with its rivals. However, a direct comparison of O2’s new German tariffs with those of Vodafone is difficult because O2 is selling the handset separately, whereas Vodafone bundles the cost with the plan. However, comparing the total cost of ownership over the life of the two-year contract highlights O2’s competitiveness.

For example, O2’s Blue XL tariff costs €1,740 over two years, which includes unlimited voice and messaging and 5GB of data per month. In comparison, Vodafone’s Red Premium tariff costs €2,880 for unlimited voice and messaging and 10GB of data per month. O2 may be offering less data, but as the fourth-largest player in the German market it needs to be disruptive and is using pricing as the lever.

Interestingly, both plans provide additional SIMs for use in other devices. Ovum believes that the shared data plans, where data allowances can be used across multiple devices, will become an increasingly important model for mobile broadband in the future. While O2’s data allowances are not particularly generous for such an offer, they are at least a start.