UK’s EE claims LTE parity with South Korea
EE (formed from T-Mobile UK and orange UK) has announced that it is to double the speed of its 4G network. In theory the new ‘double speed’ 4G/LTE will offer 150 Mbit/s which is faster than the speeds claimed by the UK’s premium fixed broadband suppliers such as Virgin Media and BT. In practice, 4G users are likely to experience only around 30 MBit/s. EE’s CEO, Olaf Swantee claimed that, “We’re officially the world’s fastest 4G network, in line with South Korea.”
The most controversial offering is a shared data plan which EE intends to offer to families.
“The doubling of LTE speeds [immediately in 12 cities] across the UK is a nice headline, commented Emeka Obiodu, principal analyst at Ovum.
“But, on its own, we don’t believe it is a standout game changer as Telcos struggle to sell LTE as a speedier network,” Obiodu added.
He continued, “Fleshing out its shared plans for customers, and positioning it as a way for families to save money is a canny move in today’s austerity-dominated society.”
“We also liked how EE is going to use the shared plans as a nudge to push customers into a higher-prized plan.”
“This is what Verizon Wireless has done successfully in the USA and is one reason why its ARPU is rising.”
“For EE, offering pay as you go LTE is a tactic to corner the market for sporadic users of mobile broadband. ”
“However, the prospect of splitting data amongst multiple users could be a double-edged sword,” argues Ernest Doku, telecoms expert with uSwitch.com.
He observes that, “Sharing minutes and texts may certainly help consumers to get their money’s worth.”
“Our research suggests that 55 per cent of people use less than half of their minutes and 61 per cent only half of their texts each month.
So EE might adversely impact its ARPUs if its consumers use the package cunningly.
The real dual in EE’s crown, however, is that Apple’s iPhone 5 won’t work on the 4G/LTE networks offered by O2 and Vodafone when they are expected to launch in September .
Whereas the iPhone 5 will work on EE’s 4G frequencies. So EE is obviously hoping many disenchanted O2 and Vodafone iPHone 5 users might churn over to EE as a result.