UK operator Everything Everywhere’s new sub-brand EE has announced the pricing for its LTE and fiber services ahead of commercial launch on October 30th. Steven Hartley, principal strategy analyst at Ovum, takes a closer look at the implications for the UK mobile sector.
The pricing positions the brand very much at the high-end of the customer spectrum, but the premium to legacy services isn’t as high as those seen elsewhere. This suggests that aggressive targeting of its rivals’ most valuable customers awaits.
When considered against other unlimited minute and text plans on high-end devices (like the iPhone 5 or Samsung Galaxy SIII) plan, prices are similar. However, EE customers would also have to pay £49 for a 16GB device, whereas it would be free on other networks, such as O2.
Nonetheless, compared to the high premiums charged for LTE at launch across Europe, this is refreshing, even if it will not appeal to everyone’s budget.
The lack of a high premium means that EE can emphasize LTE’s benefits. These should prove popular in the UK, where network performance is generally poor compared to the rest of Western Europe. Instantly available high-quality video and web pages give EE a big marketing advantage over its rivals. Combined with a limited price premium, EE’s rivals will no doubt be nervously awaiting its impact on high-spending, high margin customers. Nonetheless, the emphasis on the high-end means that we don’t expect seismic shifts in customer numbers in the short-term.
Meanwhile, Matthew Howett, regulation analyst at Ovum comments: “While they are not likely to get much sympathy from their rivals, EE have a challenging role to play setting the standard for 4G pricing and advertising principles in the UK. From what we have seen, the simplicity of the pricing, particularly for those already familiar with Orange tariffs, and the decision to stay away from unlimited data plans are both pragmatic moves. Come next week, the rest of the industry is likely to make the most of highlighting what customers can do on their upgraded 3G networks, expressing the benefits in ways customers will easily be able to understand – for instance how long it will take to upload photos to facebook, and download movies on the go.
However customers on these networks will of course only see the same benefits as EE customers come the auction of spectrum planned for next year.”
Source: www.ovum.com
