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Consumer & Business Customer Pay Monthly terms & conditions (January 2009) These terms and conditions contain two separate agreements, a Services Agreement which covers our supply of airtime and other services, and an Equipment Agreement which covers our supply of phones and other equipment. The general terms and conditions are part of both agreements and, where required for the sake of clarity are referred to as the General Terms. The agreement that applies to you will depend on what you have purchased from us, but if you have purchased an airtime tariff and a handset or other relevant equipment both the Service and Equipment Agreements will apply.

1.1 The following paragraphs set out the terms and conditions for the supply of Services by us (if you have purchased Equipment please see the separate Equipment terms and conditions below). In addition, the General Terms supplement this Agreement and are incorporated into this Agreement. Words used in this Agreement may be defined in the General Terms. Please refer to the end of this document for a full explanation of the defined terms used in it. Services, offers and promotions may be subject to additional terms and conditions advertised on our website www.o2.co.uk and/or in our marketing literature. Please check our site regularly as these terms are updated from time to time.

1.2 Use of our WAP Services and Web Services are subject to the Web, WAP and i-mode® terms and conditions, available to view on our website www.o2.co.uk. Please check our website regularly as these terms are updated from time to time.

1.4 Use of the Broadband Service is subject to Broadband terms and conditions available to view on our website www.o2.co.uk/terms. Please check our website regularly as these terms are updated from time to time.

2.1 The Service is not available in all parts of the United Kingdom nor in all other countries and may be restricted to certain areas within those countries where access to the Service is possible. Not all Mobile Phones will be able to receive the Service. We only agree to provide the Service to Mobile Phones of a make and type approved by us.

2.2 If you wish to make international calls or use our international roaming service we may ask you to demonstrate a satisfactory billing history or to pay a deposit which may be used to offset the cost of those calls. Unless otherwise stated, if you use your Mobile Phone abroad you will be charged for incoming calls. Roaming calls may also take longer to be billed.

2.3 We may, using reasonable skill and care, exercise our discretion to refuse to provide any part of the Service to you (other than the making or receiving of calls). Service is not fault free and it may be impaired by geographic, atmospheric or other conditions or circumstances beyond our control and you will be entitled to the quality of service generally provided by a competent mobile telecommunications service provider exercising reasonable skill and care.

2.4 We will do our best to provide Service to you and any Additional Services requested by you (such as roaming) or if you instruct us to change your Service (e.g. to bar calls) by any date we have agreed with you but our ability to do so may be affected by circumstances beyond our control.

2.5 We will allocate a number for use of your Mobile Phone on the Network. The number does not belong to you and may only be transferred to another service provider in certain circumstances (including payment of our costs) details of which are available on request from Customer Services.

2.6 We or our agents may record or monitor some telephone calls, emails and any other communications between you and us (or our agents) for training and quality control and our lawful business purposes.

2.7 We will use reasonable endeavours to maintain Content but it may be incomplete, out of date or inaccurate and is provided on an "as is” basis. It is a condition of us allowing you access to Content that you accept that we will not be liable for any action you take in reliance on Content.

2.9 The Service enables access to Content. You may only use Content in a way that does not infringe the Rights of others ('Approved Use') and you must comply with all other instructions issued by us regarding use of Content. You shall not store, modify, transmit, distribute, broadcast, or publish any part of any Content other than for an Approved Use. The re-selling, copying or incorporation into any other work of part or all of the Content in any form is prohibited save that you may print or download extracts of Content for your personal use only.

2.10 You are solely responsible for evaluating the accuracy and completeness of Content and the value and integrity of goods and services offered by third parties over the Service. We will not be a party to or in any way responsible for any transaction concerning third party goods and services except in the case of negligence on our part.

2.11 If you use our eCare service via o2.co.uk it is a condition of this Agreement that you provide us with a current email address for billing purposes and that you maintain this address and advise us promptly of any changes to it. It is your responsibility to verify that your mailbox is in proper working order and you must assume the risk of all consequences for errors in sending and receiving email, unless caused by our negligence.

2.12 We reserve the right to add to, substitute, or to discontinue any Additional Services at any time. We do not guarantee the continuing availability of any particular Additional Services.

2.13 You may ask us to include your Mobile Phone number in a telephone directory and/or a directory enquiry service. However, you should be aware that, if you request this service (for which we may charge a fee), your number will be made accessible to companies that compile information for marketing purposes. If you are worried about this, you can prevent it from happening by registering your mobile phone number with the Telephone Preference Service on www.tpsonline.org.uk. If you want your mobile phone number to be included in a directory and or a directory enquiry service, please contact Customer Services.

3.1 This Agreement commences, following acceptance of your application by us, on the day on which you receive your SIM Card or, if you do not receive your SIM Card at the time of purchase, for example if you connect to an online tariff, on the day your SIM Card is dispatched.

3.2 At the end of any Minimum Period or following commencement of the Agreement if you have selected a SIM Only tariff, this Agreement will continue until it is terminated in accordance with paragraph 8 below.

4.1 Occasionally we may have to: (a) alter the number of your Mobile Phone, or any other name, code or number associated with the Service for reasons beyond our control such as where requested to do so by a governmental or regulatory body or where we reasonably believe that the alteration will enhance your use of the Service. If this is the case we will give you reasonable notice; (b) temporarily suspend the Service (or any part of it) for operational reasons or in an emergency or for reasons of security; or (c) bar certain numbers from the Service on a temporary or permanent basis in order to prevent fraud or in circumstances where we would suffer a direct loss.

4.2 From time to time we may have to migrate your Account from one billing platform to another. In these circumstances we will notify you if migration of your Account will affect the Service in any way.

5.3 You must pay your monthly bill by the date stated on the bill. For any overdue payments we may charge interest at 2% above the base lending rate of HSBC Bank Plc. Interest is charged on a per annum basis, calculated daily. We reserve the right to make a charge for our reasonable administration costs which we incur in the case of late payment or non-payment of Charges.

5.4 We cannot set usage limits on your account and you will be liable for all Charges incurred by use of the Service under this Agreement whether incurred by you or anyone else using your Mobile Phone (with or without your knowledge). You must pay the Charges to us or as we direct.

5.5 We will monitor usage of the Service via your account for the purpose of controlling our credit risk and your exposure to fraudulent usage. If usage on your account gives us cause for concern we will attempt to contact you by text message or by calling your Mobile Phone. If we are unable to contact you we may have to restrict use of the Service on your Mobile Phone and/or we will have the right to bar your Mobile Phone. You will need to contact us before you can use any of the chargeable aspects of the Service. You may be required to make an interim payment before the Service can be reinstated.

5.7 We may require you to pay your charges by direct debit. An additional charge may apply if you pay by another method and you will be advised if this is the case. If you are paying by payment card you authorise the payment card company to disclose to us and, under strict obligations of confidentiality, to our sub-contractors and/or agents, details about your payment card account in so far as is necessary in connection with your agreement with us and to inform us if your payment account is terminated or suspended at any time.

5.9 Where a Handset is restricted to use on the Network we reserve the right to apply a charge for releasing or unlocking the Handset. Details of the charge are available by calling Customer Services.

5.10 Where tariffs include inclusive allowances which apply to certain calls, texts, data or messages up to a monthly limit, unused inclusive allowances cannot be carried forward from one month to the next unless expressly stated by us. In this context "monthly" or "month" means calls recorded by us within your monthly billing period, which may not equate to a calendar month. Generally, calls, data and messaging will be set against applicable inclusive allowances in the order in which they are recorded by us. Certain types of calls, such as roaming calls may take longer to be billed.

5.13 Unless otherwise stated, call prices are quoted by the minute and are charged in one second increments. Each call is charged excluding VAT and then rounded up to the nearest penny. VAT is then added where applicable to the total of all charges on your bill. Minimum call charges apply, see www.o2.co.uk for details of this and other charges. Prices are correct at time of going to print but are subject to change.

5.14 You may be charged to receive certain premium rated text messaging services and multi media messaging services. We will not notify you of call charges for premium rate services operated by third parties. Details of these charges and any changes will be available on our website (http://www.o2.co.uk/premiumnumberpricing). Please check these before calling premium rate numbers.

5.15 We may require you to provide us with a deposit as a condition of providing the Service to you or continuing to provide the Service to you. We may hold this deposit until you have paid all sums due to us from you under this Agreement. If you owe us money, we may set off the deposit against any amount due to us. We will refund any deposit we are still holding, on request, on termination of this Agreement or, at our discretion, after three months of continuous on time bill payments. No interest is payable on any deposit held by us.

5.16 If you are a Consumer Customer who has selected a tariff with a Minimum Period, you may not move to a tariff which offers a lower rate monthly subscription for the first 9 months of your Minimum Period. After 9 months, you may only move down one tariff, per month, to the next lower priced tariff unless you pay us the difference between the monthly subscription on your original tariff and the lower rate tariff we agree that you may move to. Where you have notified us you wish to move to the next lower tariff, unless we advise otherwise, your new tariff will commence at the start of your next billing cycle.

5.17 If you change tariffs for any reason e.g. when upgrading or moving to a promotional offer, any unused allowances will be lost. You may not be able to move back to your old tariff after you have upgraded.

6.2 You agree: (a) to provide us with such information as we reasonably request in connection with this Agreement and that all factual information you provide to us is correct; (b) to take adequate precautions to prevent damage to your SIM Card or unauthorised use or theft of the SIM Card; and (c) that the SIM Card shall at all times remain our property; and; (d) to inform Customer Services as soon as possible by telephone (or if you have eCare at mycare@o2mail.co.uk) if the SIM Card or your Mobile Phone is lost, stolen, damaged or destroyed or likely to be used in an unauthorised manner and to co-operate with us in our reasonable security and other checks.

6.3 You must not use or permit any other person to use, and if you are a Business Customer ensure that your employees do not use, the Service: (a) fraudulently, in connection with a criminal offence, in breach of any law or statutory duty; (b) to make a call or send a message or to take pictures or video or send, upload, download, use or re-use any material, which is offensive, abusive, indecent, defamatory, obscene or menacing, a nuisance (including to our staff) or a hoax in breach of any Rights or privacy or otherwise unlawful; (c) to cause annoyance, inconvenience or needless anxiety, as set out in the Communications Act 2003; (d) to generate Artificially Inflated Traffic; or (e) to persistently send automated unsolicited communications.

6.4 You must not, and if you are a Business Customer ensure that your employees do not, establish, install or use a GSM Gateway without our prior written consent, which may be withheld at our absolute discretion.

6.5 You must tell us immediately by advising The Data Controller at Telefónica O2 UK Limited 260 Bath Road Slough SL1 4DX or, if you have eCare, at mycare@o2mail.co.uk, if anyone makes or threatens to make any claim or issues legal proceedings against you relating to your use of the Service or the Content and you will, at our request, immediately stop the act or acts complained of. If we ask you to, you must confirm the details of the claim(s) in writing.

6.6 You agree that you are procuring the SIM Cards and the Service solely for your own use and that you will not re-sell or otherwise act as any form of distributor in respect of the SIM Card or the Services.

7.1 We can at our discretion and without notice bar your SIM Card from making calls (other than to the emergency services) and disconnect it from the Network: (a) if any of the circumstances in paragraphs 6.3, 6.4, 6.6 or 8.1 apply to you; (b) in the event of loss or theft or if we have reasonable cause to suspect fraudulent use of a payment card or your SIM Card; (c) if you are persistently abusive, make threats, repeatedly cause a nuisance or annoyance or otherwise act illegally towards our staff or property, or that of our agents; or (d) If you do anything or permit anyone else to do anything which we reasonably think adversely impacts the Service to other O2 customers or may adversely affect the Network.

7.2 You must pay an unbarring charge and, if applicable, a re-connection charge if the Service is temporarily barred and/or your SIM Card is disconnected from the Network for the reasons stated in paragraph 7.1. As a condition of unbarring or reconnecting your Service we may require you to authorise a direct debit authority for the payment of Charges.

7.3 If we bar your Service because you break this Agreement, the Agreement will still continue. You must pay all Charges until the Agreement is ended by notice under paragraph 8.2.

8.1 In addition to anything else we can do, we can end the Agreement at any time if: (a) you fail to pay Charges when they are due, including any deposit we have asked for or break this Agreement in any other material way and you do not correct the situation within 7 days of our request; (b) we have reasonable cause to believe that the Service is being used in a way forbidden by paragraphs 6.3, 6.4 or 6.6, even if you do not know that the Service is being used in such a way; (c) we have reasonable cause to believe that you are or have been in infringement of our Rights; or (d) you are the subject of a bankruptcy order, or become insolvent, or make any arrangement with or for the benefit of creditors or if being a company you go into either voluntary or compulsory liquidation or a receiver is appointed over your assets.

8.2 This Agreement may be ended by either you giving at least 30 days’ notice in accordance with paragraph 7 of the General Terms. You must pay all Charges incurred during the Agreement.

8.3 If this Agreement is ended during any Minimum Period, you must pay us the monthly subscription charges up to the end of that Minimum Period. This does not apply if you end the Agreement for the reasons in paragraph 8.4.

8.4 You may end this Agreement by giving us written notice if: (a) we break this Agreement in any material way and we do not correct the situation within 7 days of receipt of your written request; (b) we go into liquidation or a Receiver is appointed over our assets; or (c) you are a Consumer Customer and we increase charges by more than 10% for calls, messages or data that form part of your inclusive allowance or your Line Rental Charges or change this Agreement to your significant disadvantage in accordance with paragraph 9.2 of the General Terms, provided you give us a minimum of 30 days’ written notice (and provided you notify us within one month of our telling you about the changes). This does not apply where: (i) the increase or change relates solely to Additional Services in which case you may cancel, or stop using, that Additional Service; (ii) the increase does not exceed the Retail Price Index ("RPI”) figure in any twelve month period; or (iii) the increase or change is as a result of a requirement by a government or competent regulatory body. For the avoidance of doubt this shall include any increase in VAT or the imposition of a similar or new tax on the Service or us.

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