August 5, 2013

EE Finally Have Some 4G Competition, But Not That Much…

O2 4G coming soon

EE Finally Have Some 4G Competition

The big 4G news last week was that O2 had finally revealed the date and some of the details of their planned 4G launch. This has been a long time coming and with the date set for the 29th of August EE will finally soon have some competition in the 4G space, and yet from what we’ve seen so far it doesn’t look like they have much to worry about.

O2 are launching in just three cities (London, Leeds and Bradford), which might seem reasonable enough, after all they’ve got to start somewhere. But by the end of the year i.e. four months later, they only aim to have brought 4G to ten more cities. By comparison EE have already switched on 4G in 95 towns and cities across the UK just nine months after launch. That’s 95 towns and cities in just over twice the amount of time that O2 are aiming for 13. By the time the year ends and O2 has 4G in 13 cities who knows how many places EE will have brought coverage to, but our money is on a lot.

To be fair, a lot of the places EE have been bringing 4G to lately have been towns rather than cities, which presumably requires less time and work, while O2 are focussing on cities initially, but there still seems to be a surprisingly large gulf between the two networks. Indeed four months after EE launched their network they’d brought 4G to 37 towns and cities, including a good number of major cities. If we were to go purely on relative numbers that would suggest that EE’s rollout was nearly three times as fast as O2’s, but even taking into account the relative size’s of places EE’s progress seems a lot faster.

Not only have EE brought 4G to the UK with remarkable swiftness but the company is also now working on doubling the speed of 4G in certain locations. Already it’s doubled the speed of its 4G network in 15 cities with more to come. Obviously that’s not something O2 can focus on yet but if further highlights just how far behind they are.

EE also have another advantage in that they sell the iPhone 5 on 4G while O2 won’t be able to as it doesn’t work on the frequency that O2 is using for 4G. That won’t be as much of a problem once the iPhone 5S launches as that should work for them, but having no iPhone at launch will definitely hurt them.

We’d have loved it if O2 had managed a stronger launch. Choice is good and so is competition. In fact we’d somewhat hoped that O2 and the other networks would kick off a price war, forcing EE’s somewhat high prices down or at least offering us a cheaper alternative.

Yet despite O2’s comparatively weak position and extremely limited coverage their 4G prices actually look set to be higher than EE’s, with tariffs starting at £26 a month while EE’s start at £21 a month. Granted that £21 a month is a SIM only deal, while O2 haven’t specified what’s included in their tariffs, but at best they seem to have matched EE who have 24 month tariffs that include a handset from £26 a month. Surely O2 need to be doing a little bit more than just matching EE’s prices if they want to gain any traction in the market, as right now a lower price point is pretty much the only selling point they can offer over EE when it comes to 4G. Their coverage is far worse and their speed in a lot of places will be worse too.

Perhaps O2 are relying on brand loyalty or lack of awareness from consumers of just how lacking they are compared to the competition. Whatever the case we can’t see O2 making much of a dent on EE’s market share unless they have something up their sleeve.

The only truly positive thing we can say about O2’s 4G launch so far is that they got out of the gates before Vodafone or Three, but they’ll need all the breathing room they can get with such slow progress targets. You never know, perhaps O2 have intentionally set a low target of 13 cities by the end of the year so that when they actually rollout 4G to 20 cities it will somehow look impressive.

But the way things look right now EE have nothing to worry about, while Vodafone and Three have all the more reason to take their time and launch with a bang rather than a whimper.

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