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O2 broadband has extended its two months free broadband deal for the duration of August, offering subscribers annual savings of up to £44.

This week BT launched a money-saving incentive whereby all new customers who sign up online for its broadband packages benefit from an introductory period during which time they pay nothing for their broadband.

The offer applies to BT’s offerings that combine home phone and broadband, plus those that feature a broadband connection and a TV component. Alternatively, customers can opt for a triple play deal that entitles them to a home phone, broadband connection and on-demand TV from BTVision and still take advantage of the deal.

Just a day after BT’s announcement, O2 has confirmed that it will now be extending its own free broadband offer. Now available until the end of August, this entitles all consumers who sign up online for O2’s Standard, Premium and Pro packages free broadband for two months.

After the initial period has expired, the Standard deal, which as the name suggests is designed for the average broadband user, is £12.23 for new customers and £7.34 per month for existing mobile phone customers. That means a total saving of £25.46 and £14.68 respectively for an impressively fast connection of up to 8Mb.

Meanwhile, the Premium deal offers savings of £29.36 for non-mobile customers and almost £20 otherwise. Finally, savings with the Pro package are £44.04 for those entirely new to O2 and £34.26 per month for mobile customers. Both these offerings feature a super fast broadband connection of up to 20Mb.

News of the raft of attractive broadband deals hitting the market and throwing a lifeline to crunch-hit consumers comes as a new survey bore out the increasing importance of the internet to people’s everyday lives. Conducted by Ofcom, the study found that poll participants would far rather cut down on holidays and dining out than reduce their expenditure on broadband or mobile broadband.

Jessica McArdle, marketing manager at Top 10 Broadband, said: "With people choosing broadband over holidays abroad they'll find the last-minute savings offered by O2 difficult to resist."

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