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...

  • rate this
    +3

    Comment number 128.

    So finally a 4G Dongle, superfast connection for my laptop, but wait..

    £25.99 a month for 2GB
    That means to download this single BBC page costs over 4p, peanuts you say but would you buy a newspaper for 40p if it only had 10 news items? I think not.

    As for video. 1 hour of iPlayer is likely to use 1/3rd of your 2GB, thats over £8!

    Rate this if you think thats too much

  • rate this
    +1

    Comment number 127.

    The investment should have gone into providing 3G coverage across the UK, first!

    What's the point of a mobile internet service when it's not mobile?

  • rate this
    +1

    Comment number 126.

    I don't have a landline, so my internet connection is via a Mobile Dongle.

    I have been putting off moving to Three's 15GB for £19/month (2 year contract) waiting to see 4G prices. Having seen them, I will go for the 15GB option, and revisit 4G in two years time.

    I can't find anybody offering unlimited tethering tariffs anymore, shame, but I suspect that this was marketing overruling technical.

  • rate this
    +1

    Comment number 125.

    As for paying £35 for an eventual limited download speed (exceed your limit and slow down), what benefit is it. I pay £7.50/mth for 250min talk, 000's of txts and 750mb of data and they gave me a free smartphone! Why on earth would I pay £35 a month when the phone I have now does everything I require. And mobile communications in the UK are way overpriced. Go to the Far East to see what I mean!

  • rate this
    0

    Comment number 124.

    Will I pay more for 4G? Hardly. What is the point of having a faster connection if I have a cap on how much I can download at that speed. All it does is bring more cash into the coffers of big business. As it is, I'll carry on as before. No doubt they'll get some mug to pay more but not this one!

  • rate this
    +1

    Comment number 123.

    No.

    That was easy !

  • rate this
    +2

    Comment number 122.

    121. Rich

    Because the government auction off the 4G bandwidth licences to the carriers for £billions to raise cash for themselves. Carriers recoup that from the customers.

    Or that could just be a load of crap and they're robbing us.

  • rate this
    +2

    Comment number 121.

    I am confused. In the US when we moved to 4G LTE there was no increase in plan charges. Why are the UK carriers trying to raise prices? I have never understood their UK pricing with over reliance on handset subsidies and exorbitant data rates.

  • rate this
    0

    Comment number 120.

    3G has been an awesome addition to my pocket since 2009 when I got my first smart phone. I've always had unlimited data because I hated having a topup phone -wanting to send 2 texts and school and only having only 12p- but I feel like £35 a month is enough, faster connection would be great, but not for more money.

  • rate this
    +1

    Comment number 119.

    The entire mobile scene has become a bloat of rubbish, hype and tek that just rolls along. It's a phone, ok. When it does data properly on a platform that is actually useful besides downloading song and video for a price, then it will still be grossly over-priced.

    This stuff is grossly over priced, do expensive that it should be made in UK. I keep looking for the badge.

  • rate this
    0

    Comment number 118.

    It looks very over priced for what you're getting I have to say. Granted you will be able to use the iPhone 5 and its 4G benefits, but in all honesty, even if I was out of contract, I see no real reason to move and I am generally an early adopter. This is one I will sit out.

  • rate this
    +1

    Comment number 117.

    After signing up for a £50 a month contract for my all singing Galaxy S3, you can imagine my annoyance on discovering Google maps + sat nav does not work properly without a permanent connection. OK if you have a wi fi connection, but that sort of defeats the point. Walking around central London with my phone in the air for all to see, trying get a 3G signal.

    Crap !

  • rate this
    +1

    Comment number 116.

    @115. Cameron Well, there is one uk network which offers unlimited data, and that doesn't mean 1Gb like most of the other networks definition of unlimited. When i moved house , i had about 3 weeks before i got home broadband set up, used my mobile as a wifi hotspot, used about 22 Gb in that time, with no complaints from three about data usage, and no extra charges.

  • rate this
    0

    Comment number 115.

    The big draw for me for 4G is the reduced ping times (time it takes for your 3G to respond) but I also think I'd end up using a lot more data. They need to double the data allowances at those price points to make this tempting.

  • rate this
    +2

    Comment number 114.

    What a staggering waste of money. Go ahead speed freaks pay through the nose.

    We can now classify nations into three groups:-

    Developing nations
    Developed nations
    Over developed nations

    People starve and go hungry yet money and brain power is wasted on this sort of nonsense. Pathetic.

 

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