What makes O2 more expensive than smaller networks?

O2 tend to offer some of the most expensive plans

If you’ve compared prices across all UK providers, you’ll have found that O2’s SIM only deals tend to be on the higher end of the price range. That’s especially true when compared to smaller, budget providers.

The price of their phones tend to be pretty decent but the usage plans (mins, texts, data) you have to add to them are the same as SIM only. That means their phone deals end up middle of the road in terms of cost.

And that’s just the basic cost of your deal. Go over your allowance O2’s data add-ons can cost up to £12 for 1GB. If you don’t have a specialist plan, international calls are similarly expensive.

On top of that, O2 will raise the cost of your SIM only or usage plan (but not the cost of your phone) each year according to inflation, which can get very expensive. So, why exactly are O2’s plans so expensive?

Useful link: O2’s full range of SIM only deals

Building and running a main network costs money

One of the main reasons O2’s prices are high is that they incur all the costs of running and expanding their network. They have widespread 4G data signal and their 5G signal has expanded to 2000+ UK locations.

Best current 5G-ready SIM only deals on O2

O2 have spent billions on their 4G network. Ultimately, they have to get back that investment from paying customers, which part explains their higher prices.

Smaller providers that piggyback off O2 only pay a relatively small amount to use their network rather than incurring the full cost. It’s part of the reason they’re almost always cheaper to join.

But Three for example manage to run their own network and compare much more favourably on price to O2. So what else is keeping their prices higher?

Useful link: Check O2’s signal using their map

O2 spend a lot on advertising and branding

O2 also incur the cost of marketing their brand. They advertise on TV, the radio, billboards, bus stops, newspapers: you name it, they advertise there. And that all costs money.

In recent times, O2 have launched a huge advertising campaign to emphasise their inclusive EU roaming. The other main networks have stripped theirs away and O2 are capitalising on this to sell their brand.

Best current O2 SIM only plans with EU roaming

O2 also sponsor a lot of venues and stadiums across the UK, including one of the biggest venues in the UK being the O2 arena in London. This is a huge cost to keep their brand in people’s minds.

It also builds trust. When people come to making a decision, O2 are a trusted brand. But all that expense to attract customers does have to be recuperated. And it’s the customers themselves that pay.

Useful link: Read about O2’s sponsored venues

It costs a lot to run stores and call centres

You’ve likely seen an O2 store on the high street. Many people prefer to get hands-on with a phone before buying it. Customers also appreciate one-to-one advice from a real person when buying.

Of course, maintaining physical stores, rent and paying staff all costs money. So it’s another factor contributing to O2’s higher prices. You’re getting a bigger service, for a higher price.

It’s also worth pointing out that O2 offer telephone based customer service. Though some of this is based abroad to keep costs down, it’s another corner they’re not cutting like the cheaper alternatives do.

Many people will decide that this is something they’re willing to invest in by paying a bit more for their deal. Others won’t be fussed and are happy with online-only customer service.

Useful link: Find the nearest O2 store near you

There’s no real reason for O2 to lower their prices

The last reason why O2 sell their plans at higher prices is because they can. O2 have the largest number of users of all UK networks, so people clearly don’t mind that much.

O2 are probably the most well known mobile network in the UK. So lots of people will simply join O2 off brand recognition alone, rather than looking for a cheaper deal and ‘risking it’ elsewhere.

Customers also feel safer joining a premium brand rather than a budget one, as they might think you’ll get a worse network experience for joining a cheaper network. But that’s not always the case.

Overall, O2’s high prices are due to the costs of running their network, marketing their brand and the lack of reasons to lower them. Below we cover the providers who get full access to O2’s network at lower costs.

Useful link: Our guide to the cheaper providers on O2’s network

You can get O2’s network quality on these cheaper providers

There are a few budget providers that use O2’s network for signal while offering cheaper deals than joining O2 directly. Our favourite is probably Sky Mobile as they offer unlimited streaming data for their TV apps.

You do need to be a Sky TV customer to get the most out of this. But even if you’re not, they offer well priced SIM only and phone contracts and they have the best data rollover scheme of all networks.

Best current SIM only deals on these alternative networks

Tesco Mobile are also a decent choice. They often offer cheaper deals than Sky, and if you’ve got a Clubcard you get access to special offers and can turn your Clubcard points into vouchers off your monthly bill.

giffgaff are the last provider on O2’s network and offer cheap and flexible 1-month SIM only deals. They’re also the only one to offer inclusive EU roaming, so they’re brilliant if you still want to roam for no extra cost.

Useful link: Read our Sky Mobile review