If there was any doubt that things are going to get tasty LTE-wise in the UK, it was earlier this week, when 3, the UK arm of telco brand Hutchison, announced that when it launches its own LTE network later in the year it will not be charging a premium. The implication was the users will pay exactly the same as they do now, and as 3 currently leads the market for low-cost unlimited 3G data, that’s a pretty enticing prospect.
It’s also one that shoots a considerable large volley across the bows of the good ship EE, which got itself in the LTE race early by launching a service in November. It was able to do so after pulling off the deft trick of getting the regulator, Ofcom, to let it re-farm its 2G 1800MHz spectrum for LTE. Having bigged up the benefits of 4G at its launch it then proceeded to make the most of this by launching LTE as a premium service – with high prices for lengthy 24-month contracts with small data allowances, the latter of which the network took a lot of flak for in the press.
With the auction process for the digital dividend 800MHz frequency and 2.6GHz now underway, ironically pushed earlier by Ofcom to reduce EE’s 4G lead-time in the market, EE reacted by announcing lower prices for its entry-level tariff. Instead of £36 a month for 500MB of data it would now only charge £31 a month, which over a 24-month period that’s a significant saving of £90. The price of a handset such as the Nokia Lumia 820, would also come down to £29.99. However, the measly 500MB bundle would remain.
At the other end of the market it would cater for high-end users with a new 20GB a month tariff with a phone and unlimited calls for £61 or the same thing but SIM-only for £41.
It’s not quite the slashing of prices that some had reported though – just one real saving on the entry-level package.
3 is currently offering an iPhone 5 with unlimited 3G data and 2000 minutes for £36 a month, which is more or less the same, aside from 500MB of LTE data vs unlimited 3G. When both of these become LTE, EE will have a problem.
Of course EE does have a couple of decent added value services to offer, such as tethering, inclusive BT wifi, Underground wifi, 2-4-1 cinema tickets (better known as Orange Wednesdays) and the EE Film Store – but it’s unlikely this will be enough to sway many people away from an unlimited package.
Of course EE does have one key advantage – it has an LTE network that is up and running with coverage is increasing all the time with new markets being announced on a regular basis. What EE needs to continue to do is keep up the marketing pressure on signing people up before the other come online with live networks – which will be around six months from now.
It might get a bit longer to play with as the iPhone crowd won’t switch to LTE unless they can use their favourite fruity phones. The current European model of the iPhone 5 only supports 1800MHz, so all the other operators will be looking at Apple to make them happy and release an 800/2600MHz LTE supporting iPhone next time round – which is unlikely to be until September/October 2013 – a year or so following the iPhone 5 launch.
When this happens one has to imaging that EE’s pricing will look somewhat different to what it looks like at the start of 2013.
Pricing strategies are certainly going to be one of the hot topics addressed at the LTE World Summit 2013, taking place in Amsterdam in June, so be sure to get your plans together now to attend.