O2 scrapping unlimited internet; imposing 500MB/month fair usage cap

June 10th, 2010

O2 have announced that from June 24th, all of their tariffs will come with a fair usage limit of 500MB – rising to 1GB for customers willing to shell out £60/month.

At the moment, O2 are unique in that out of the five major networks (O2, Vodafone, Orange, T-Mobile and Three) they don’t define a fair usage limit for their tariffs. From June 24th, it’s all change as O2 are imposing a fair usage of 500MB on their smartphone tariffs. This change happens on the same day that O2 launch the iPhone 4. For customers subscribing to tariffs from £40/month tariff they’re upping the cap to 750MB; and for customers subscribing to the £60/month tariff the cap rises to 1GB.

Who does this fair usage limit apply to?

The fair usage limit applies to all contracts which begin from June 24th onwards. This includes new customers and customers who upgrade (or perhaps we should say downgrade) their existing contracts.

O2 say that the vast majority of their customers use less than 500MB per month. According to their statistics, only 3% of customers use more than 500MB of data. We don’t think this is a particularly useful statistic – is this 3% of O2’s total customer base of 18 million people? If so, we’d expect 540,000 customers to be affected by this fair usage cap. Furthermore, there is certainly an upward trend in data consumption – according to O2’s very own statistics, watching just one hour of online video would use up your entire monthly 500MB download limit. To think that nobody would want to watch video on their mobile phone in 2012 is inconceivable. Consumers should now be asking themselves not just whether 500MB/month is enough for them but also whether they think 500MB/month will still be suitable for them 24 months down the line.

This changes in fair usage limit don’t apply to Pay As You Go tariffs (which already have a fair usage limit). Existing customers who stay on their current tariffs also won’t be subject to the new fair usage limits.

What happens when I exceed my limit?

Creative Commons License photo: James Laurence Stewart

As of yet, there is no information on what happens when you exceed your limit – i.e. whether you are automatically charged extra or whether your internet connection will be disabled. However, O2 have said that customers exceeding the limit will need to buy bolt-ons: £5 for 500MB of data or £10 for 1GB of data.

We’ve warned about the huge costs of exceeding a fair usage limit on this blog before by illustrating how someone on an “unlimited” internet connection could run up a bill of £4,000 watching England’s Group C qualifying matches in the World Cup. We know that O2 will notify customers when they reach their limit but we hope that O2 won’t automatically charge extortionate rates for anyone going over.

How does the new fair usage limit compare to the other networks?

We’ve compared the fair usage allowances across the major networks before and looked specifically at fair usage allowances of “unlimited” internet packages.

The network offering the highest fair usage limits is now T-Mobile. They have a fair usage limit of 3GB/month for Android phones and 1GB/month for all other phones. Furthermore, T-Mobile have written into their terms and conditions that customers won’t be charged for exceeding the limit.

Unfortunately, since the Advertising Standards Authority ruled in December that 500MB/month was “unlimited internet”, we’ve seen a freefall in the fair usage allowance limits across the networks. Last month, Vodafone introduced charges for exceeding 500MB/month and Three cut their fair usage allowance to 500MB/month. O2’s new fair usage limit is just the latest in the line of fair usage restrictions. We wouldn’t be surprised if T-Mobile drop their fair usage allowance soon, into line with the rest of the networks.

What is the complete tariff lineup?

Creative Commons License photo: Jeff Kubina

According to the O2 Press Release, the new lineup of smartphone tariffs is as follows:

Monthly cost: £25 £30 £35 £40 £45 £60
Minutes 100 300 600 900 1200 Unlimited
Texts: unlimited unlimited unlimited unlimited unlimited Unlimited
Data: 500 MB 500 MB 500 MB 750 MB 750 MB 1 GB
Wi-Fi: unlimited unlimited unlimited unlimited unlimited Unlimited

How can I avoid the new fair usage limit?

If you were thinking of signing up for an O2 tariff, you can avoid the fair usage limit by signing up before June 24th. If it’s the iPhone 4 you’re looking for – you’re out of luck as it’s not available until the 24th. If you’re looking to get an Android phone such as the HTC Desire, T-Mobile offer a fair usage limit of 3GB which easily trumps O2’s offering.

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About Ken

Ken Lo

My passion is helping people to get the most out of their mobile phone. I've been blogging at Ken's Tech Tips since 2005.

Aside from writing about mobile technology, my interests are in software development, digital marketing and physics. Outside of the blog, I work with numerous technology companies helping them to explain their product and helping them to market it to consumers. Please get in touch for more information.

Your Comments

We'd love to hear your thoughts and any questions you may have. So far, we've received 30 comments from readers. You can add your own comment here.

  1. Kelly said:

    Hi Ken, I subscribe to O2 and have for a few years.I used to be able surf the net anywhere but yesterday when I was out and about it came up that I had to pay via BT for the privelege. Given my contract hasnt changed what has happened. I can vaguely remember getting something about this that O2 customers would not be able to use safari. What do I need to do and how surf the net when I'm not at home?

  2. James Jones said:

    I cannot believe o2's cap on their internet usage. I used to be on a tariff with unlimited internet but when I re-newed my contract in January 2012 I was told it's no longer available.
    I currently now get 1gb and have a seperate bolt on of another 1gb and this still isn't enough and all together this is costing me nearly £70 per month. With new great services like netflix , spotify etc I regret renewing my contract with o2. I have to carry a mifi (Portable wifi dongle) around with me which is on the '3' network on a 15gb per month limit which works out even more expensive as well as i'm running this as well as the phone. I've now found out that '3' has just introduced unlimited internet on their phones with a 60gb fair usage policy. I wish I had known they was going to introduce this as I would have waited on and gone with 3. Very disapointed with o2 and now I've got this contract for just under a year and a half 🙁

  3. Rob Speranza said:

    The way I use my phone, apps, video, lots of emails – I use my 500MB in a couple of days. I need that data to be higher. 5GB a month I could understand in this day and age. 5MB? Ridiculous.
    I hope that some kind of campaign could be started against this BS. Its something that if enough people complain about it, it will change.

  4. brad said:

    i am on a PAYG thing and i top up £15 a month for unlimited internet and texts, but 1 month i went over, and since then everytime i go on the internet at the end of the day i get charged a pound everyday so my money goes no where not happy can anybody tell me what to do

  5. Oh wth said:

    I just brought a iPhone 4 with a o2 contract.
    Wish I hadn't, never knew about the new data capping.
    I only use about 100mb per week x 4 = 400mb, only because I only surf the web. 750mb is more than enough for me, but still I'm displeased..
    What if I wanted to watch a few movie online??? I rarely do but knowing my Internet is limited makes me feel uncomfortable…

  6. Nobody said:

    Why is everything so restricted, they need to use the millions they make to invest in giving us MORE, not less. They have also cut mobile broadband.

    Maybe with all the spending cuts other things are cut by default when they dont really need to be, but for companies its an ideal time to cut the service they provide and make more money than ever before.

  7. Jaspal Goshal said:

    My brother sold me his old iphone, so I signed up for a 12 month simplicity plan from O2. However, I need to know what happens if you go over the 500mb per month allowance which applies to me because I bought it after all the tariff changes 🙁

    Anyway, the O2 feller said it's unllimited until Septemeber, which then you'll be charged 20p per mb. A few days later I rang O2 to confirm this and the employee seemed quite stunned when I mentioned 500 mb, as if he never heard of the changes. He told me that my plan was 'unlimited' for the full 12 months and only those who apply for simplicity after September will be capped 500 mb.

    Anyway, I rang them up again to speak with someone else to confirm 'this', and another employee told me it's unlimited until September, from which the cap then automatically applies itself and I 'won't' be charged for going over it, just notified to buy a £5 bolt-on for an extra 500 mb for that month only.

    So to summarize, one O2 employee says 20p per mb for exceeding 500 mb after September. Another says 'unlimited' for the full 12 months; and another says 500 mb after September, but 'no charges' will be applied????

    If O2 employees, can't even agree with one another – none of us have got any chance :S

  8. Mr. Freak said:

    It seems it's not just web bolt-ons o2 has been messing with. To my horror I've just noticed that they've changed their pay as you go mobile broadband as well. Normally it costs £15 for 3GB of data for 1 month. However I've just looked at the top-up page and it's been changed to £15 for 2GB for 1 month. However it says "Promotional amount 3GB until 30/09/10"
    They've also reduced the daily top-up from £2 for 500MB to £2 for 200MB. and they seem to have scrapped the weekly top-up option all together!
    What a rip-off, they're reducing the monthly data allowance by 1 third! someone please tell me it's the summer heat getting to me and I've just imagined this!

  9. Q said:

    Regarding willis web suggestion

    Unfortunately Gif gaf Only have unlimited Internet until the end of June.

  10. Q said:

    Hi Ken

    Do you know if the iPhone 4 microsims will work in the iPad.

    Also does anyone know if The Three sim only Internet (which gives you unlimited data) for £5 can be cut down to microsim size and used in an unlocked iPhone or an iPad?

    1. Ken Lo
      Ken replied:


      O2 have said that you can't use your iPhone micro-SIM in an iPad and vice versa. Nobody has tried it yet though… they should be technically compatible but I suspect they will disable your account/SIM on their side.

      And with the "SIM Only Internet"… again technically you should be able to but please make sure it doesn't break any terms and conditions of the contract.


  11. Bob said:

    Hi Ken

    Which network currently offers the best fair usage limit?


  12. DC said:

    I currently have an iPhone 3G on an O2 simplicity contract with unlimited data.
    I was told by O2 this afternoon that if I buy an iPhone from Apple and keep my current contract, O2 would swap my sim for a micro sim, but come October ALL contracts will become restricted with the data cap. Anyone else heard this?

  13. Mike said:

    In response to the john and the first comment.

    You can actually cut your original sim down to micro sim size, abit crude i know, but it apparently works..

  14. GaryGadget said:

    Hi Ken,
    I think the page is an old but current page that does not take into account the new iPhone4 or the upcoming text and web tariff.
    However, I still think that it should still apply, after all, I am an ‘”existing customer within (my) twelve months inclusive O2 Web & Wi-Fi Bolt On period” and I will “upgrade to a new iPhone from O2”
    However, I am sure their will be O2 smallprint/loophole that will defeat my efforts to keep my unlimited (uncapped) Web & WiFi Bolt-On.
    I will keep you informed.

    1. Ken Lo
      Ken replied:

      Thanks Gary – do keep me in the loop.

      Just a thought – if O2 do try to withdraw your Web & Wifi, I fail to see why you couldn’t simply sign up as a new customer. You can keep the web & wifi for your old 3G S phone or find a way of getting your old SIM card to work in the iPhone 4.

  15. GaryGadget said:

    I have just read on O2s website (link below) that if I upgrade to a new iPhone with O2, my remaining 5 months of free ‘unlimited Web & WiFi’ will be forfeited(lost) and I will get a NEW 12 MONTH Web & Wifi period !!!
    Will this be ‘unlimited’ or ‘unlimited with a 500mb cap’ ???

    I am confused

    comments please

    Should an existing customer within their twelve months inclusive O2 Web & Wi-Fi Bolt On period upgrade to a new iPhone from O2, they will forfeit any remaining inclusive months. A new twelve month inclusive O2 Web & Wi-Fi Bolt On will commence from the point of upgrade


    1. Ken Lo
      Ken replied:

      Hi Gary,

      I’m not sure if that webpage refers to the 3G S upgrade or iPhone 4 upgrade. I had the impression that Web & Wifi won’t be around any more – iPhone 4 PAYG will be on the Text and Web tariff instead.


  16. GaryGadget said:

    You can buy an o2 iphone Sim on ebay for £30-£35 and once you top up with your first £10 top-up you then get 12mths unlimited web and wifi (unless O2 change the terms+conditions but they don’t think they can/will). That is what I did and have been using for the last 6 months. I am going to get another one to put in my iPhone 4 after I have cut it to fit the micro-sim slot. This will hopefully get around O2s 500MB Cap. I am not sure whether to activate it before the 24th or wait until my remaining 6mths expires. The new sim has an activate ‘before date’ of Jan 2011.
    I welcome any follow-up comments

    1. Roger replied:

      I did just that but to use with my iPad. It worked fine for two weeks then the sim stopped working. Still getting a good signal but no internet.
      I'm getting a message "could not activate cellular data network". Any idea why can't use the sim anymore?
      Can it be flagged and stopped by o2?

      1. Ken Lo
        Ken replied:

        Hi Roger,

        It could be, but it could be a whole variety of reasons. You should call O2 customer services to find out.


  17. Willisweb said:

    You can easily make a microSIM from a regular SIM. There are plenty of tutorials on the Internet.

    You can pick up a free microSIM from O2, Vodafone and Orange shops (just ask for an iPad SIM) that you can use as a template to cut your existing SIM.

    If you want an iPhone 4, you are happy with the O2 coverage and still want unlimited data you could just buy a PAYG iPhone 4 from O2 stick a chopped down giffgaff SIM in there (which you can get for free). £10 p.m gets you unlimited data, unlimited texts and 100 minutes. With no contract tie-in.

  18. Ivns said:

    I have read on some website that you can use special made cutters to ‘trim’ down a standard sim to micro-sim or DIY type thing as explained in this Youtube video: http://www.youtube.com/watch?v=w2Pkm2PUG-c

  19. Ivns said:

    Right, so if I buy a iPhone simplicity plan from here before the 24th June: http://shop.o2.co.uk/tariffs/simplicity/iphone/1_month

    Will I still receive unlimited data until I cancel this simplicity contract?

    Also, do you know is there a way for O2 to find out what handset you are using on your sim and cap it according to the handset model (ie. difference between 3GS and 4)?

    1. Ken Lo
      Ken replied:

      Hi Ivns,

      Yes I believe that all O2 Pay Monthly tariffs still still have unlimited internet if you sign up before the 24th. The cap is contract dependent not handset dependent: so even if they do find out you are using the iPhone 4 on Simplicity for iPhone, you wouldn’t suddenly get a cap. The main issue is that the iPhone 4 doesn’t actually take standard-sized SIM cards which means you wouldn’t be able to use a standard Simplicity SIM card within an iPhone 4.


      1. Ken Lo
        Ken replied:

        Furthermore, be aware that buying an iPhone 4 will probably be in the region of £400-£500 on PAYG.

  20. Emrys said:


    Im currently on an O2 45 contract, which expired in January. I was planning on upgrading to the iPhone4 when it comes out – but wondering if there is a way to upgrade without losing the unlimited data allowance?


    1. Ken Lo
      Ken replied:

      Hi Emrys,

      Usually I would say yes – you grab Simplicity for iPhone now before the cap is imposed, you buy the iPhone 4 on PAYG when released and then you simply use the “Simplicity” SIM in it. Unfortunately seeing as the new iPhone 4 only takes micro-SIM, this is not possible. If you can get O2 to put “Simplicity for iPhone” onto a micro-SIM for you before the price rises it might be possible but I suspect they won’t do it.


  21. John said:

    I have a simplicity for iphone tariff. So does that mean I am still on the unlimited data plan? Also If I buy the iphone4, I will need a micro sim. I’m not sure how they are going to convert my current sim over but I am concerned if I get a new sim will they change me over to the new data usage rules.

    I wish I hadnt signed up for a 12 month contract now with 02!

    1. Ken Lo
      Ken replied:

      Hi John,

      If you grab your tariff before June 24th (as you have), you should be OK. W.r.t switching over to iPhone 4… I don’t know what will happen with that. You might be able to keep the Simplicity for iPhone tariff you currently have if you provide your own iPhone, but like you said… you need a microSIM which makes it tricky.


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