Nearly 3 out of 4 UK mobile users put off by EE's 4G LTE contract prices

+Martin James Oct. 25, 2012 at 10:30 More articles by Martin James

Earlier this week EE finally announced its 4G tariffs, offering a choice of five data allowances starting at £36 a month, with all voice calls and texts coming completely free.

Judging by the comments on that piece, the reaction among Mobot readers is various (sometimes colourful) shades of "wtf?", and rest assured - you're not alone.

In fact, with less than a week to go before EE's 4G service is switched on in the initial wave of 10 UK cities, the results of a ThinkBroadband poll suggest the majority of UK consumers believe the service is overpriced.

Just to remind you, EE's tariff options pitch the price of joining the 4G revolution at £36 per month for 24 months – that gives you a near-pointless 500MB of mobile data to play with each month.

The other options deliver 1GB, 3GB, 5GB or 8GB of data at increments of £5, plus you've to factor in the cost of your 4G-ready handset too, with the Huawei Ascend P1 the only phone you don't have to pay in for – and then only on the 3GB tariff or above.

And when asked whether the cost of upgrading to 4G LTE would put them off, over 72% of respondents to a ThinkBroadband poll answered in the affirmative.

Now let's face it: nobody's ever going to complain about something being too cheap, but nearly three out of four is a fairly serious figure.

One obvious reason is the lack of an all-you-can-eat data plan – a ridiculous situation since 4G is championed as your passport to do all kinds of data-heavy stuff like video-streaming that's hit and miss over 3G.

There might also be the notion that given how choice leads to competition, which typically means lower prices for the consumer, the lack of choice in EE's current 4G exclusivity implies that prices are higher than they should be.

No matter what the poll suggests, however, arguably the real obstacle for most people right now isn't price, but network availability. Even if the increased competition doesn't affect prices at all, it's a simple fact that the biggest jump in 4G uptake in the UK will come when there's more than just the one provider offering it.

I suspect this was the intention to be honest. At these prices, with these at allowances, they know they aren't going to get everybody and his dog signing up and using 15GB of data a month. Three out of four people aren't interested? That's great news. With a new network on new technology, they aren't going to be looking to steal yet the market. I wouldn't like to be an early adopter on EE though - I can see prices dropping and allowances growing when the other networks launch 4G next year. Having run their 4G network for 9 months by then, EE will be in a very good position to offer higher capacities, higher speeds and cheaper tariffs.

As an aside, the Huawei Ascend P1 isn't the cheapest phone on the network. The Nokia Lumia 820 is free on all tariffs

Last edited by satchef1, Oct. 25, 2012 at 11:44

Message deleted by satchef1

Last edited by satchef1, Oct. 25, 2012 at 11:41

If that was the intention then I'm not sure they have a clue what they are doing...

Surprised it's only 3 in 4 tbh, that 1 in 4 could make them a fair bit, mind you without seeing how the poll was worded I can't tell if that means the 1 in 4 are interested or just have different reasons for not being interested than cost.

I am disgusted by this plan. They are cashing in big time on people who were hoping 4G would be their saviour. I still think a 'all you can eat' 3G package would be better than this over priced sh*te .

If that was the intention then I'm not sure they have a clue what they are doing...

Companies in tech never do. The internet always knows better, and doesn't need to worry about such trivial things as network and customer service capacity, roll-out times and profit margins.

I doubt very much that EE's decision with tariffs was the right one for the consumer. On the other hand, it probably is the right one for EE. It's not like it'll be difficult to drop the tariffs in the future if they aren't meeting their targets for customer numbers. Going the other way - raising prices and lowering data allowances - is never popular.

Last edited by satchef1, Oct. 25, 2012 at 18:10

When you think that the majority of people won't have even seen that poll since they are not interested in 4g and only 1 in 4 people who are actually interested in upgrading to a faster network aren't put off this leaves EE with very few customers. I would love 4g but with data caps and prices that high I will not be investing in it for some time.

I thought it was a good idea that EE could rollout a 4g network to get the ball rolling but thinking about it I think they should have been made to wait until the auction so all the networks could have had competition which would have lowered prices.

I don't think vodafone, o2 or three network need to worry about EE getting a head start if this is how they are going to promote their new network.

Its a rip-off! I am an eternal early adopter, but they are offering too little for too much. Its a data centric network without the data!! The comparisons to 3g data usage are not valid! I use alot more data on FTTC than I ever did on ADSL, the same will be true for 4g. The comment that folks will switch to wifi at home also misses the point - for all those stuck on adsl, 4g will be faster (20 times faster upstream!).

FAIL!

Rolling something out to appeal to the lowest amount of people possible is the right one for EE when they could be taking customers from other networks?

If they priced aggressively they'd get a lot more customers. They'd also have lower profit margins and would need to put up more investment to create a larger initial capacity (or would they left the network become congested instead?). While they might grow market share quickly, they wouldn't be making a lot of money. It would take a long time to see a good return on the initial investment, and if they've already captured most of the market at a low profit margin, it could be difficult to grow revenue in the future.

What they've done here is price to that 28% of the market that think the prices are OK. By doing this they will attract less customers, but they will make more profit off each one. They won't need as much money to get the network off the ground as capacity won't be as high, and as such they will see a return on investment sooner. Going forward they have the opportunity to cut prices to grow market share further and can wait until costs are lower before doing so.

Basically, they're taking the right decisions for long-term growth rather than "We have a six month head start! Smash and grab!". When the other networks start rolling out 4G, EE will be six months ahead. They'll have a better knowledge of the technology, their network will have better coverage and will be in more towns and cities than any other network. That's when the price war will begin, and EE will be in the best position.

As I said above without seeing the survey the 28% is guesswork, even then surveys aren't worth much.
I think your interpretation of their intentions is just wrong tbh. I doubt they are aiming to fail to grow their network at this time.

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