Will Death Of Unlimited Mobile Data Plans Hamper Smartphone Growth?

O2 announced a few days ago that it is canning its unlimited mobile data plans with users now having to choose between 500MB, 750MB and 1GB per month data allowance depending on their monthly contract cost.

The Telefonica-owned company was the only mainstream company not to have a cap on downloads. T-Mobile has a 3GB one, Vodafone goes down to 500MB while 3 UK finds a middle ground with 1GB. Indeed, O2 is now implementing what other networks have been doing since the beginning.

Apple's partner in the US, AT&T, also announced that it was canning its unlimited data plans for the iPad and the iPhone. But even as unlimited mobile data plans disappear, the march of the smartphones will go on for a number of reasons.

First, people tend to consume surprisingly little amount of data on smartphones (not the iPad), so much so that on average, 97 percent of O2 uses consume only 500MB of data per month. By putting a hard limit on data download, the company is actually targeting those 0.1 per cent of smartphone users - around 2000 - that are consuming 36 percent of its data capacity.

A quick calculation shows that each of these download on average 72GB worth of data per month, which means that each of them consumes as much resources as 360 "normal" users. Removing these super-users may even improve service as additional capacity is freed and gives O2 more room to breathe.

Still, there is one little known mobile virtual network operator that is offering unlimited data allowance for its users as long as the phones are not used for tethering and that it won't be used in a mobile broadband modem. Singularly, this MVNO is part of O2 itself and is known as GiffGaff.