EE lowers 4G pricing in response to criticism

UK operator EE has unveiled details of new tariffs for its exclusive ‘4G’ service, following criticism over pricing and usage restrictions and as rivals gear up to launch services of their own.

From January 31 until March 31, consumers will be able to pay just £31 ($49) a month on a 24-month contract, compared with a previous entry-level rate of £36 a month.

The deal comes with unlimited UK calls and texts and a monthly data-usage allowance of 500MB.

UK operator EE has unveiled details of new tariffs for its exclusive ‘4G’ service, following criticism over pricing and usage restrictions and as rivals gear up to launch services of their own.

From January 31 until March 31, consumers will be able to pay just £31 ($49) a month on a 24-month contract, compared with a previous entry-level rate of £36 a month.

The deal comes with unlimited UK calls and texts and a monthly data-usage allowance of 500MB.

Smartphones available through the deal include the HTC One SV LTE and the Nokia Lumia 820, with upfront fees starting at £29.99 – representing a saving of £90 on existing deals.

For so-called “super-users” wanting more than the maximum 8GB a month currently available, EE (London, UK) is also launching a new plan with a usage cap of 20GB a month.

The 20GB plan is available from this week on a 12-month, SIM-only arrangement for a fee of £46 a month, provided customers sign up before February 28.

Take-up of the new 20GB service is likely to be extremely limited given EE’s comment that only about 1% of customers have expressed interest in using more than 8GB a month.

“It’s our aim to offer consumers the most comprehensive range of 4GEE price plans,” said Pippa Dunn, the chief marketing officer at EE. “With these new options we’re looking to not only make 4G smartphones even more accessible, but offer even greater value for the small number of super-users out there.”

A joint venture between France Telecom (Paris, France) and Deutsche Telekom (Bonn, Germany), EE was given a headstart in the UK’s 4G market after regulatory authorities gave the operator permission to provide services using 1800MHz spectrum it already owns.

EE has been racing to sign up customers before its rivals win 4G spectrum and launch services of their own, but its offers have been heavily criticized for being costly and restrictive.

“EE’s decision to offer both a relatively lower-priced tariff at the entry level and a plan with more data at the top end is clearly in response to customer feedback,” said Matthew Howett, a telecoms regulation analyst at Ovum. “More importantly, though, it could be viewed as a pre-emptive strike aimed at its competitors, who are soon to launch tariffs of their own once the long-overdue auction of 4G licenses is completed.”

EE’s rivals have been quick to pounce on reports of its difficulties, hoping the negative publicity will persuade consumers to delay purchasing a 4G package.

EE has been notably coy about subscriber take-up so far, which suggests the service has not lived up to initial expectations.

“Trying to convince consumers to buy into something they haven’t yet seen or had experience of is a difficult task, and is further complicated by EE’s desire to both make the most of its headstart over the other mobile operators, and to clearly differentiate the 4G offering from the rest of its offering,” said Howett. “In the end it has gone for the middle ground and priced services at a premium but not at levels completely inaccessible to the mass market.”