O2 'wise' to end mobile internet

The decision made by mobile operator O2 to can its i-mode mobile internet service was the right one, according to analysts.

John Delaney of Ovum said that the lack of flat-rate pricing and having no Nokia handsets available in the package had doomed the i-mode service to failure.

Earlier this week O2 stated that it "will not launch any new i-mode handsets from July 2007... a limited range of devices has restricted [i-mode's] growth and we don't see that changing".

Delaney said that the range of just seven handsets which carried the i-mode service was a big problem for O2.

"Not only is the range of handsets a small one, but it also excludes Nokia, Europe's most popular handset brand. Excluding anyone who wants a Nokia phone from the target customer base is a considerable handicap to place on any newly launched mobile service," he said.

The way the service was charged was another issue that put potential customers off, according to Ovum. Payment was dictated by time spent online rather than a flat rate, which many other mobile operators offer.

"Regular users of the internet on mobiles will become increasingly dissatisfied with 'having the meter running' while they surf, and the trend is already moving in favour of flat-rate data tariffs.

"On the whole, we believe that O2 is wise to call an early halt to its involvement with i-mode," said Delaney.

Though O2 will not add any handsets to the range, it will still continue to sell the existing i-mode handsets and will support the i-mode service until July 2009.

www.ovum.com
www.o2.co.uk

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