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
    -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
    -10

    Comment number 70.

    Have people forgotten that you also get unlimited texts and minutes? Taking a quick look at O2, their iPhone 5 £46 a month contract has 2gb data, while EE has 3gb at much quicker speeds. Looks like EE charge £50 for the handset, but I'm not sure if I'm looking at the new plans, so potentially if it is reduced to £41 a month it's cheaper on EE.

  • rate this
    -8

    Comment number 9.

    @3. "I can blow through 500Mb in an afternoon."

    I find this quite surprising: I use my phone daily for internet access, so much so that I sometimes have to recharge it twice a day: eBay, PayPal, YouTube, Facebook, Twitter, Amazon, my own business as well as entertainment or shopping. Yet I have never exceeded my monthly 1GB quota.

    Unless my needs alter I cannot see myself ever needing 4G.

  • 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
    -3

    Comment number 82.

    You'd almost think EE are forcing people to buy it going by the comments on here. There's a simple solution, don't want it? Don't buy it!

    But let's not stop progressing technology just to satisfy miserable people who can't afford it. Don't see why the uk should always be behind on data speeds, 3G is a joke. 4G is much better but it has to be paid for, most people will use it in a few years.

 

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