O2 leads the way with broadband bundling

A top telecoms and IT analysis firm has said that O2’s combined mobile and fixed-line broadband tariff is set to revolutionise the future of broadband subscriptions.

Since September this year O2 has been offering 12 months free subscription to its 8Mbps fixed line broadband to customers signing up for its £20 per month mobile broadband.

Analysys Mason said mobile operators would benefit greatly by following O2’s lead.

As well as providing more value for customers, combining fixed line and mobile broadband helps take the strain off O2’s 3G network.

In addition, it encourages O2 customers to switch their fixed line broadband contract to O2.

So far, fixed-line broadband offerings from mobile operators have only been ‘modestly successful’, says Matt Hutton, principle analyst at Analysys Mason.

Setting up a fixed-line service is costly, and combining mobile and fixed line broadband can help to create a larger customer base and build scale.

O2’s £20 per month service has a 3GB monthly download limit - available on most other networks for just £15.

Analysys, however, believe the offer of free fixed line broadband gives O2 the cutting edge.

Hatton said that before September, O2 had been struggling to sign up mobile broadband customers as quickly as its competitors.

By combining fixed line services with mobile broadband O2 has managed to sign up more customers whilst at the same time ensuring that its fledgling 3G network will not be overloaded with the extra traffic.

In addition to this, Hatton points out that bundling services has been demonstrated to increase customer loyalty and reduce the number of customers changing networks.