Will you pay more for 4G?

 
man on phone

The EE 4G service goes live next week giving the owners of Orange and T-Mobile a unique opportunity to take business away from their rivals.

We were missing one vital piece of information about the service - but now we have the tariffs and the whole industry is examining what amounts to a huge gamble on customer behaviour.

For EE has in effect told its 3G customers that they will have to pay an extra £5 to go 4G. Right now the iPhone 5 on Orange, with a 1GB data allowance, costs £36 per month. If that same customer wants to upgrade to 4G they will have to pay £41 - if they still want the 1GB of data.

But of course the whole sales pitch for 4G is the much higher speeds, which means you are likely to use far more data.

I'm told that the average T-Mobile customer on a 3G contract uses between 1 and 1.5GB a month, so if they start giving the 4G network a pounding it isn't hard to see them hitting 3GB at a monthly cost of £46.

I put it to EE's boss Olaf Swantee that his company is risking putting consumers off the new service, just at the time when he could be winning them away from rivals. But he tells me that EE is offering the best 4G tariffs available anywhere in the world.

"We really think we've priced it at the sweet spot," he says. "It's all based on months of consumer research."

Mr Swantee points out that his firm is also launching a whole range of 4G services, including EE Film, which will offer a wide range of top movies to download and stream.

I point out that EE has only got a very short window of 4G exclusivity. But he thinks it might take time for rivals to get up and running even when January's 4G auction is complete.

"It's not just buying the spectrum," he says. "There's a lot to it - we've spent twelve months to get it ready. I'm very confident that we can stay ahead."

But for most consumers, 4G will be an unknown product whose qualities have yet to be tested in the real world. Asking them to pay a premium price is quite a risk.

When I ask Mr Swantee to predict how many people will take his new service, he starts to answer - then thinks better of it after checking with his PR advisor.

But if Orange and T-Mobile do not persuade plenty of Vodafone, O2 and Three customers to switch sides, then Britain's 4G revolution will have got off to a faltering start.

Let's see if there are queues at the EE shops when the service goes live next week.

 
Rory Cellan-Jones, Technology correspondent Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this
    +1

    Comment number 133.

    72 ATNotts

    Judging by the lack of comments on this story only us mobile Luddites can be bothered to read the article - the others obviously are all out signing up for their new 4G contracts - or venting their spleen on the article on Lord Birchard's proposals for the retired....

  • rate this
    +1

    Comment number 132.

    72.Ron

    You're on!

    The whole industry thrives on users gagging to be the first to get the latest devices so if I'm wrong, the industry will have, for probably the first time failed! - Either that of the contributors to this thread are mobile ludites - bit like myself!

  • rate this
    +1

    Comment number 131.

    Just as HD tv is offered as a premium (what a con) so will every increase in data speed, as speed is all they have to sell. If you want it (but preferably actually need it - think carefully as their is a big difference) then do so. Personally I have been trying to find the cheapest method of picking up a few emails now and again, so far the best I can get is £3.50 a month, still a bit OTT for me.

  • rate this
    +3

    Comment number 130.

    I haven't even bought 3G, let alone pay for 4G. (And don't forget that 5G is on its way)

    If I want to watch a movie, I want a nice comfortable chair, a sensible sized screen, a hot mug of coffee and a bowl of olives.

    I saw someone walk into the back of a parked car while playing a game. I was the only one who laughed because the everyone else were too busy with their own phones and tablets.

  • rate this
    +1

    Comment number 129.

    A tad expensive don't you think?

    Doesn't look particarly good value to me for something that isn't really going to change the world.

    Think I'll stick with the tried & tested until the price comes down significantly - which it will...

 

Comments 5 of 133

 

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