31 August, 2013

The state of 4G in the UK


Many column inches has been written this week about the state of 4G, as Vodafone and O2 launched their 4G services on Thursday. There's no need to bore you with the summary here as you can get it elsewhere. As I work for CInergy International whose biggest customer is the mobile operator, Everything Everywhere, these market developments are important.

So, EE have had the 'mindshare' of the market for the past 10 months, being the only provider with 4G. They have publicly stated that they want a million 4G customers by the end of this year (see Everything Everywhere sees strong takeup of 4G).

Having walked the floors of their call centres, specifically in the Sales and Retention areas, then I can assure you that the deals for home broadband and 4G mobile (in particularly in combination) are amazing.

Pricing

According to Mobile News:
  • EE have strongly differentiated the pricing of their 4G plans from their 3G plans - mainly because they can.
  • Vodafone and O2 will be adding £5 premium for their 4G plans.
  • 3 will be charging the same price as their existing plans.
Operators are assuming that the faster speeds will encourage more consumption, meaning that consumers will feel obliged to purchase more expensive bundles with greater data allowances.

In my mind, the entrance of Vodafone and O2 really opens up the market.

News from this week's 4G Coverage

However, below are some of the interesting nuggets from the coverage this week:
  • Three will launch 4G in 3 cities in December (fortunately for 3 and for consumers these are: London, Birmingham and Manchester). See Mobile News.
  • Note that Three have upgraded their network to be 3.5G - giving perfectly tolerable speeds of  > 10Mbps.
  • For existing 3 customers to upgrade to 4G, they with a 4G compatible device will need to instal software, but do not need to sign a new contract, change tariffs, swap SIMs or visit a store. (We'll see how successful that upgrade programme is!)
  • The iPhone 5, works on the 1800 Mhz spectrum only. EE uses this frequency whereas O2 or Vodafone's uses different frequencies. One assumes that the anticipated release of the next iPhone will solve this problem.

4G Coverage plans

EE still leading, as you'd expect, having launched first.
  • Three - 98% cent of the population by the end of 2015.
  • EE - 98% coverage by the end of 2014
  • O2 and Vodafone - 98 per cent “by 2015”.

Network Frequency

Frequency is important for 4G - and has shaped the way the market has developed. (See Vodafone and O2 begin limited roll-out of 4G networks.)
  • The 800MHz band which was previously used for TV signals. This low frequency spectrum is best for providing long-distance 4G services, helping give access to the countryside, as well as offering superior indoor coverage.
  • The 1.8GHz band, previously used for 2G and 3G networks, but can be reassigned for 4G.
  • The 2.6GHz band, which had previously been used by operators of cord-free video cameras to send back footage of live events, including London's Olympic Games. The high frequency can deliver faster speeds across smaller distances, making it best suited for densely populated cities. 

What the operators bought
  • EE built its 4G network by re-appropriating some of the 1.8GHz spectrum bandwidth previously used for its 2G and 3G services. It has since bought space on both the 800Mhz and 2.6Ghz bands.
  • Vodafone paid the most for its spectrum bands, buying part of the 800Mhz and 2.6GHz bands for just over £790m.
  • O2 paid £550m for part of the 800MHz spectrum and Three paid £225m for other parts of the same band. 

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