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A new market-leading mobile broadband pay as you go deal from O2 has been unveiled, with a view to addressing consumer concerns over hidden costs.

O2 has announced the launch of a new pay as you go mobile broadband deal, which it claims will restore consumer confidence in mobile broadband by being cheaper and more straightforward than rivals’ offers.

Customers who opt for the Mobile Broadband Pay & Go offer pay just £29.35 for a USB modem/dongle – down from a previous price of almost £100 and well beneath its nearest priced rival 3, which charges £39 for its dongle on pay as you go deals. Consumers will then pay for their usage with a range of new tariffs. For £2 per day, users are entitled to 500Mb download limit, while for £7.50 per week the limit is pegged at 1GB. Meanwhile, a 3GB limit is available for those who pay £15 per month.

The deal, which is available online only, offers users download speeds of up to 3.6Mb as well as unlimited access to over 6,000 Wi-Fi hotspots across the UK. They will also benefit from O2’s new coverage checker and 50-day Happiness Guarantee. These two initiatives were launched in November and since this time O2 claims that numbers of returned modems have slumped, with the company attributing this to providing customers with better information at the time of purchase.

Peter Rampling, O2 marketing director, said the flexibility of the deal and pricing is likely to particularly appeal to the younger market, in a situation directly comparable to the way in which pay as you go phones fostered a surge in young people’s mobile phone usage.

He explained: “Last month we stated our intention to clean up the mobile broadband market and give consumers the fairest and most honest deals. Our O2 Mobile Broadband Pay & Go will appeal to those customers who want to snack on the internet without the need to commit to a long term contract.

“Our younger customers want to live online and can do so with Pay & Go at affordable prices.” O2’s customer-focused initiatives recently saw them named the Best for Customer Satisfaction at Top 10 Broadband’s 2008 broadband awards. The company also picked up the gong for Fastest Broadband.

Industry watchers expect rival internet service providers to slash their mobile broadband prices in weeks to come to bring them more in line with O2’s new deal.

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