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

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  • rate this
    0

    Comment number 196.

    @birchy

    Your comments on the home servers etc, its unusual for those to be actively blocked by any ISP these days (unless they have reason to believe your doing something dodgy) I'm running very fast fibre broadband and have no issues running any of those services for home use.
    The 4G network is only as good as the signal & back haul to the servers holding the data, connected @ 4G don't mean dot

  • Comment number 195.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 194.

    Until the networks and the phone manufacturers realise the vast majority of phone users just want the ability to reliably make a telephone call on their smartphones, the sooner the overpricing of data packages and the hype over smartphones will stop.
    I would happily pay a couple of pounds more a month if my operate could guarantee me 100% call coverage, without calls being dropped, in the UK

  • rate this
    0

    Comment number 193.

    Some history on 3G rollout, especially Orange/EE
    and the real costs of rolling out 3G, lucky escapes, shocks:
    "a customer on that tariff would have to live for another 100 years to pay their contribution towards the purchase price of Orange!"

    http://www.gsmhistory.com/infobox/other-mobile-history/

    It will be interesting to see what the 4G auction brings,
    will history repeat?

  • rate this
    0

    Comment number 192.

    I myself am happy (now) with the customer service. They do have some excellent staff. However it was only after having 600 notes put on my account did they decide to do something about it. Now have 3.5GB data, unlimited roaming mins, texts and minutes for £31 a month with a femtocell which means coverage at home is sorted. However they do need to get their game up in the countryside.

 

Comments 5 of 196

 

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