No price premium for 4G, promises Three UK

Three, the UK’s smallest network operator, has announced bold plans to make its forthcoming 4G services available to customers on existing price plans for no extra charge.

The move would mark a radical break with industry practice so far: most European operators are pricing 4G at a premium to older 3G services, requiring customers to sign up to new terms and conditions.

Three, the UK’s smallest network operator, has announced bold plans to make its forthcoming 4G services available to customers on existing price plans for no extra charge.

The move would mark a radical break with industry practice so far: most European operators are pricing 4G at a premium to older 3G services, requiring customers to sign up to new terms and conditions.

“As we add the next wave of technology to our ultrafast network, we’ve listened to our customers and thought long and hard about the right way to do it,” said Dave Dyson, Three’s chief executive. “We don’t want to limit ultrafast services to a select few based on a premium price and we’ve decided our customers will get this service as standard.”

Three (Maidenhead, UK) is currently bidding in the UK’s auction of 800MHz and 2.6GHz airwaves that will give license winners the means to launch nationwide 4G services.

At the moment, EE (London, UK) is the only UK operator able to provide 4G, courtesy of a regulatory decision allowing it to ‘refarm’ 1800MHz spectrum originally intended for use with basic voice and text-messaging services.

EE has taken flak for charging 4G at a substantial premium to 3G and for imposing data-usage restrictions on 4G customers.

A joint venture between Deutsche Telekom (Bonn, Germany) and France Telecom (Paris, France), the operator recently cut the entry-level price of its 4G service, fuelling suspicion that its offer has failed to attract much interest so far.

Three’s announcement will be welcomed by consumers but trouble shareholders already worried about the return on investment from 4G services.

The UK government aims to net as much as £3.5 billion ($5.5 billion) from the auction, and expectations have been running high since a recent 4G auction in the Netherlands raised €3.8 billion, almost five times as much as analyst predictions.

Although the government target would be just a fraction of the £22.5 billion the public sector made from the sale of 3G frequencies in 2000, it would put operators under considerable pressure in the straitened economic conditions.

Indeed, in the Netherlands, KPN (The Hague, Netherlands) said it would be forced to cut dividends after spending €1.35 billion during the auction.

What’s more, operators had splashed out on 3G licenses in the expectation that consumers would pay generously to use 3G services.

Three said it will be launching LTE versions of the Samsung Galaxy S III and Galaxy Note II in the next month, and that it plans to add the BlackBerry Z10 to its device portfolio in mid-February.

The operator also provided an update on the rollout of its “ultrafast” network – which currently uses DC-HSDPA, an enhanced version of 3G – saying it already covers 55% of the UK population and will reach 80% by the end of March.

In the second half of 2013, Three plans to begin using 1800MHz spectrum it recently bought from EE to improve the coverage and capacity of the network.