EE prices LTE for broad-base of users while evolving core strengths to make the most of UK LTE head-start
Everything Everywhere (“EE”), the newly-created UK operator owned by Orange and T-Mobile, had a blank sheet of paper to define how it positioned in the UK market with its upcoming LTE launch. This would no doubt have been a daunting if thrilling prospect, and obviously not without a reasonable probability for failure. Rather than radical change, what EE has done is hone-in on the core operator functions while rethinking how it can differentiate in the market with them.
But more headline-grabbing than these changes is EE’s 4G pricing structure, which was always going to say the most about what type of operator it wants to be, and whether that was a premium-focused or mass-market operator.
By offering LTE at an entry-level £36 (US$57.7) per month for 500MB of data, with unlimited calls and SMS, EE has shown that it wants LTE to be accessible to its entire postpaid mobile broadband user base. At the same time, EE hopes to realize a premium on LTE from those who want more data use: all EE’s LTE price plans are at a £5 per month premium to its 3G price plans, with the most expensive being £56 for 8GB. Although it will see considerable competition on these prices when its rivals launch LTE next year, EE is unlikely to have to reduce prices by much to maintain competitiveness, and could get away with offering more monthly data on each of the current tariffs.
Alongside LTE, EE is looking to differentiate from rivals by offering value-added services that include a phone back-up service (“Phone Clone”); a film download and streaming service in co-operation with Filmflex; a music service from its Deezer unit; and a new set of roaming tariffs to encourage data usage while travelling. Prices in Europe range from £1 for 3MB to £35 for 200MB, or £70 for 500MB with Mobile Broadband, as well as an option to pay £5 per month for unlimited data roaming. EE roamers will have to sign on for one of these roaming packages when they first connect to a foreign network via a dedicated roaming screen.
LTE + focus on core operator functions = success?
Any of these initiatives by itself would be unlikely, however beneficial, to make a huge impact on UK consumers’ perceptions. Taken together with the LTE launch EE has laid a solid foundation to be able to tell a coherent new story about how it is offering the best mobile broadband experience in the UK, and how it is putting the real and existing needs of smatrphone users at the heart of what it does. Services like Phone Clone, as well as training customer-facing staff to be an expert in either iOS or Android, will, if executed properly, make a tangible difference to consumers and will also cause EE’s competitors to work out how they can improve the way they meet the needs of their most profitable users.
EE has shown real insight into what matters to postpaid UK smartphone users by focusing on the things that matter most to them: quality of experience, peace of mind, content. It has priced LTE services to both make them affordable to the majority of postpaid broadband users, as well as providing upsell opportunities to those who want to download more data per month. It should be commended for not trying to reinvent the wheel, but trying to make the ones it had run noticeably better.