The 4G race to market in the UK – the heavy rollers are in town and the stakes are high

EE4GIt’s the middle of May. The 4G auctions were in February. We are all waiting with bated breath for announcements of service rollouts. Last time I looked was when I was preparing for my 4G talks at Convergence Summit North. The word on the web was “summer”. No specifics. In fact the O2 website said summer but I’m not sure that Vodafone even said that.

Now I’m writing a 4G update for Comms Business and thought I’d take another look. O2 has removed the reference to a summer availability but has not offered an alternative. I suspect that this means Christmas which is the big payout time for mobile networks. The Vodafone website just says “later this year”.

I guess this isn’t likely to come as a surprise. A 4G network rollout will be a lot of work and cost a lot of money so I guess there is a scenario that O2 and Voda will be pacing their investment.

There is a race on here though. I hear EE already have around 330,000 subscribers and say they are targeting 1 million by the end of the year. If O2 and Voda don’t get their act together that will mean EE will be ahead of them to the tune of 1 million customers, higher spending customers, by the year end.

Personally I don’t think 330,000 is a particularly good result for EE considering they have had the market to themselves for over six months even though their ARPUs might be good. Also the EE marketing appears to me to be less than optimal.  I recently spoke to an EE reseller who said that the product strategy wasn’t particularly joined up. The company apparently sells to consumers through EE, small businesses through Orange and larger businesses through TMobile1 with three different hardware portfolios and different sets of pricing.  If I were EE that is one thing I’d be looking to sort out.

In fairness EE will have the same coverage rollout issues as being faced by the other mobile operators so there will only have been a limited segment of the market available to them in that first six months. Word is that EE will have reached 80 towns by the end of June. By the end of April that number was 62 covering 50% of the population.

According to the Ofcom Communications Market Report 2012 in 2011 there were 82 million mobile connections. Assuming the number is still the same today that would suggest that around 0.8% of the available market (330k/41m) is on EE 4G after 6 months. I guess the next six months are going to be crucial in the race. EE will have had a year’s head start on the others, assuming my Christmas guess is right. If they can sort out the marketing then if I were EE I’d be disappointed with only a million subs by the end of the year.

If I were O2 and Vodafone I’d be stepping up the pace of their own 4G rollout. The two operators are jointly building out the network, ultimately to 18,500 cell sites and according to the Vodafone blog splitting the work 50/50. It would be interesting to see how their respective rollouts are doing. Who is going to get there first in the partnership? If they are doing half the work each presumably they will be announcing the service at the same time. The timing of these announcements is therefore likely to be quite critical. Get there first and presumably get the marketing advantage. Get there second and you can tailor your own pricing and packaging competitively knowing what the other guy is offering. Get there at the same time and risk accusations of a cartel.

Whatever happens it looks like I will have to wait until Christmas before I get a 4G connection – my phone is with O2 and my laptop with Vodafone. At least I’ll know what to put in my letter to Santa.

1It may be the other way round re TMob & Orange marketing.

28/9/13 update – comparison of O2, EE and Vodafone 4G networks in London

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  1. Cary Hammond

    The page at http://www.o2.co.uk/4g still states its arriving this summer 🙂

    1. Trefor Davies Trefor Davies

      Hmm. Thanks Cary. Must have been a senior moment! A bit worrying:) I may have to eat my words . I’ll leave the post as is because I heard in a smoky back room bar that there would be a slip. I guess we’ll find out come the summer, if summer ever arrives.

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