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Research for mobile operator O2 finds flat rate packages 'waste' ?750m a year

UK internet users ‘are wasting money’

Brits are paying more than they need to for the internet, a report commissioned by telecoms firm O2 has found.

The claim relates to the fact that millions of people subscribe to broadband services based on bandwidth rather than capacity.

According to the report, British broadband users are collectively losing up to £750 million a year by paying for faster-than-needed services, with many customers subscribing to ADSL2+ "up to 20mbps" services when most only need an ADSL1 8mbps service.

The research found that only five per cent of British broadband users actually download music and just three per cent download movies.

"This research clearly highlights the need for the industry as a whole to re-think the way it sells broadband," said Sebastien Lahtinen of Thinkbroadband.com.

The study comes at a time O2 plans to launch a set of usage-based tariffs so it’s perhaps unsurprising that the conclusions of the report appear to back up the marketing angle behind the new internet services.

The claims of ‘wastage’ based on using flat rate packages ignores the reality that ISPs set their pricing based on total demand. There may well be better deals for certain types of low-use consumer but equally many will be served well in getting decent value at a flat rate price regardless of exactly how much bandwidth they use.

ISPreview.co.uk also points out that technical improvements means extra bandwidth often doesn’t cost extra and that bandwidth costs continued to fall. "A growing number of ISPs have simply replaced their ‘up to’ 8Mbps (ADSL) packages with 24Mbps (ADSL2+) solutions, often at no additional cost," they said.

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