EE finds 4G a hard sell

 
Battersea Power Station lit up for 4G launch

Just three months after the launch of the UK's first 4G network, the "Sale" signs are going up at EE. The company has unveiled what it describes as "new price plan offers" to offer customers more choice. But what EE is actually doing is cutting prices in what looks like an admission that it got its initial offer wrong.

When I spoke to the company's CEO Olaf Swantee last October, he was confident about the strategy: "We really think we've priced it at the sweet spot," he said. "It's all based on months of consumer research."

But complaints came thick and fast - in particular about data. The fact that customers upgrading from Orange or T-Mobile would pay £5 more for the same amount of data struck many as unreasonable. After all, the whole point of 4G was that lightning-fast speeds meant that you would want to consume far more data.

Now EE is going some way to recognise that. Its entry price has been cut from £36 to £31 a month - though you still only get 500MB of data for that. (Incidentally, those who signed up at the original price won't be able to switch to the cheaper deal, which is bound to cause anger.)

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Customers who signed up at the original price won't be able to switch to the cheaper deal”

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And it's bringing in a new £46 a month 20GB Sim-only deal designed for what it calls "super-users". EE says it has introduced this after "listening to customers" but still insists that only a tiny minority - less than 1% - of 4G users have shown a desire to have more than the current 8GB limit.

But maybe it's a question of chicken and egg. If the initial prices had not been so high, more people would have signed up and chosen to use more data. That certainly seems to be the message in a report out today from Deloitte that warns mobile networks of an almost insatiable desire amongst smartphone users for data.

When I asked EE whether the new price plans were a response to poor uptake of 4G, I was told the company could not disclose any numbers, but had been "very pleased with the customer response to the launch of EE".

The rest of the mobile industry will be watching this move very closely. With Ofcom's 4G auction starting this month, operators will be wondering just how great the demand from customers is going to be and working out what that means as they bid for spectrum.

Last autumn it looked as though EE had pulled off a coup by getting Ofcom to allow it to launch 4G before the rest of the industry. Now it seems the firm may have done its rivals a favour by running a live consumer experiment on their behalf.

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

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  • rate this
    +29

    Comment number 36.

    And they are surprised?
    The coverage is rubbish, the phones expensive, tariffs expensive, shop staff poor and the whole thing smacks of a scam to get more money out of the public for a service that they already have via the free wifi that most high streets have. after all how many people want to stream a film while they're shopping.....

  • rate this
    +2

    Comment number 35.

    27. Alan Robinson-Orr
    "I'm still on 2G personally. I have an old phone that I can use to phone people and to text."

    I am as well, and a number of times when friends with more costly smartphones and more expensive contracts are unable to actually make a phone call, I have instead with no problem. And that is in the very centre of London.

  • rate this
    +4

    Comment number 34.

    -

    Hey Orange/EE, how about spending your money on getting a decent coverage first?
    Even in some parts of London you don't get a good signal.
    O2, T-Mobile and others are much better. And travel abroad- no problems outside towns.

    This is a good example of someone having the wrong priorities.

  • rate this
    +2

    Comment number 33.

    They marketed at city customer who already have fiber-optics. If they went into the countryside who are stuck at 1.5Mb they may have a few more takers for both mobile and home networks.

  • rate this
    +4

    Comment number 32.

    "Now EE is going some way to recognise that. Its entry price has been cut from £36 to £31 a month"

    Bring it down to £3 a month and I may consider using it. Overpriced rubbish.

  • rate this
    +2

    Comment number 31.

    This is so predictable it's almost not newsworthy. I pay £15/mth for all I can eat 3G. I won't be paying any more than that for a long long time. It's perfectly fast enough.

  • rate this
    -10

    Comment number 30.

    @15

    A tip: take your sim card out while you're using the net. Then you've got unlimited free data. You won't be able to make calls until you put it back, but I doubt you'll want to make calls and watch videos at the same time:)

    The only way your provider knows how much data you use is through the only bit of tech they put in there: the sim card.

  • rate this
    +3

    Comment number 29.

    It's been said before, but how the networks (and I'm not just including EE here) can be preparing to launch 4G this year, when 3G coverage is still patchy outside all but central London and major cities? I wonder why I bothered to sign up to 3G. The best connection speeds I get on my phone are in my home using wifi. Open wifi points in city centers and better national 3G would be better than 4G

  • rate this
    +18

    Comment number 28.

    I expect Tesco mobile will be marketing it as GG...

  • rate this
    0

    Comment number 27.

    I'm still on 2G personally. I have an old phone that I can use to phone people and to text.

    That and my computers suit me fine

  • rate this
    +16

    Comment number 26.

    4G might be fast - but then so are the tech savvy when it comes to thinking.

    So they thought "Hang on, if it's fast I'll consume more data. Therefore, this will cost me a fortune."

    And it looks like everyone came to that conclusion at the speed of 4G - no wonder it's not selling.

  • rate this
    +3

    Comment number 25.

    -

    No surprise!

    They need to sort out their basic network coverage first:
    Even in well populated part of London, you sometimes don't get a decent coverage.
    Go out on the country side and it gets worse.
    This doesn't happen anywhere on the continent.

    Why pay for 4G if not even nilG is up to continental standards?

  • rate this
    -3

    Comment number 24.

    as an ex-tech-geek, I remember the development and the run-up to 3G telephony, I was guilty of lots of wow and "brave-new-world" platitudes then.

    Well, 3G came and will be gone without fanfare, what was all the fuss? Consumers don't care about the underlying technology, its always been entertainment application, affordability and reliability.

    Like all products, right time to market is key.

  • rate this
    0

    Comment number 23.

    Ugh, no sympathy for them, they're making it very expensive for existing customers wanting to switch to 4G.

    I'm on a T-mobile contract with 7 months remaining and contacted EE (after being prompted on T-Mob's site) to switch. I said I already had a 4G phone and just want a contract switch. They said no, I must take a new 2 year contract even if I don't need a new phone!

  • rate this
    0

    Comment number 22.

    This is a huge marketing ploy by a company that got in there first with this type of communications technology.

    Its still very expensive compared to other types of contract & only available if you live nearby a big city.

    The technology is not very good indoors.

    Save your money & wait for it all to "calm down dear"

    AT&T the next owners ? its possible if this fails to impress.

  • rate this
    +5

    Comment number 21.

    They could try ensuring rural Britain gets a signal for bog standard, brick like PAYG phones get a consistent signal...!!!

    3G? You're having a laugh!

  • rate this
    +6

    Comment number 20.

    Yeah they put a download limit and then wonder why no one wants to buy it. And in any case, I think most consumers would prefer a more widely available and reliable 3g connection than this.

  • rate this
    +2

    Comment number 19.

    The promise of 4G should be unlimited or it will dead can you imagine your Wifi being capped say double that 1Gb. We seem to be happy with unlimited broadband so why not 4G ? Has a EE customer myself I will wait for more competition then prices will fall.

  • rate this
    +1

    Comment number 18.

    What frustrates me - moved to 4G contract once my old Orange one ran out in Dec - got the iPhone 5's and for about 3 days everything was ok - then kept having phone not reconnect after being offline for a while - discover after discussion with support and online searching that problem with iPhone 5 and EE 4G means switching off 4G to have a usable iPhone! What's the point...!

  • rate this
    +4

    Comment number 17.

    I've been an EE 4G (LTE) customer from launch, but I'm not a fan. I work in the city in London and can only get 4G coverage approximately 20% of the time, and not at all near home (north London zone 2). IThe net result of my upgrading to 4G is that I pay more for a big reduction in my data allocation from unlimited (3G) to 1Gig (4G), which I can't use anyway!!

 

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