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4G fails to lure customers to EE


By Barry Collins

Posted on 19 Feb 2013 at 10:56

EE's expensive drive to lure customers onto its 4G network appears to be stumbling.

EE is currently the only network in the UK to offer 4G services, and has rammed home that message with an enormous television advertising campaign starring Kevin Bacon. Yet, that exclusivity and marketing blitz has failed to deliver a huge upswing in customers joining the network.

EE added 201,000 contract customers to its network in Q4 following the launch of its 4G service in November, which accounts for only 27% of the total number of new customers (752,000) that it added over the course of 2012.

However, the network claims that the number of existing customers choosing to renew their contract with the network grew by 20% in the second half of 2012, suggesting that even if 4G is failing to lure customers from other networks, it's at least helping EE to retain customers.

The other piece of good news for EE is that it's convincing customers to pay more for 4G contracts than they were previously. The company's results presentation boasts that it's making "good progress" in migrating customers from its daughter networks - Orange and T-Mobile - and that those customers are on average paying 10% more than they were previously. Overall revenue from data services was up 10% year-on-year.

EE has been forced to defend the price of its 4G tariffs, which start at £36 per month (with handset included) for only 500MB of data - a cap which could be broken in just over five minutes if downloading at the network's maximum speed.

EE's tenure as the country's only 4G network will likely come to an end this summer, with rivals currently bidding for 4G spectrum. Those rivals are likely to put further pressure on EE's tariffs, with 3 pledging that it won't increase the price of tariffs for 4G services.

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User comments

I can't justify

more than doubling the monthly cost of my Orange iPhone contract for what I think will be a marginal improvement in data speed when I'm away from a wifi network.

By revsorg on 19 Feb 2013

Probably because it was an absolute rip off! Once other networks have 4G offerings I'm sure it'll be more reasonable...

By EddyOS_2K9 on 19 Feb 2013

Too expensive with patchy coverage and very low data caps. Am not surprised that people are not being fooled by 4G ads at this stage in the game. Hopefully when the other networks catch up some competition will help to drive down the price.

By JamesD29 on 19 Feb 2013

A cynic might suggest...

...that the uncompetitive pricing and the stingey data caps point to a network that doesn't have the backhaul capacity to support a sudden influx of heavy users.

Readers of my column will know that I'm not cynical. Oh no.

By PaulOckenden on 19 Feb 2013

Ludicrous data limits

Where I live most phones are PAYG with relatively few on contract. Even so the initial EE anouncement created an enormous buzz - among people who could not get it or afford it.

The costs appear to me to be shocking.

Who is going to pay £36 a month for high speed internet and then only use it for 5 minutes!!!? Yes I know it will work for longer in most cases.

I get 3-6Mbps from Three at home and I am over the moon with my unlimited data deal. I could not switch to EE even if I wanted the extra bandwidth as even their biggest data allowance is nowhere near enough.

I suppose, like a pensioner friend who only uses the internet for a couple of emails a month and upgraded to the speediest BT FTTC, there will be those who just have to have the fastest label and are prepared to pay for bragging rights down the pub. Good luck to EE's business model on that basis!

By JamesJones on 19 Feb 2013

Easy To Be Cynical

Recently several contracts with T-Mobile came up for renewal. They really worked hard to get a new term but at the price of a lower monthly spend. A small amount of data is included with the new tare, but so far after 2 months nothing has been used from the 250MB pot and only a tiny part of the text and voice portion. So they are very keen to retain customers but in my case not too successful at up rating them to a higher spend.
As for 4G, sorry it is firmly in the 'so what pile'. Unless I was paid to use data roaming I can see no way that it would happen.

By Jonesr18 on 19 Feb 2013

EE cant see the wood for the trees

Instead of using their exclusivity to boost customers and lock them in to provide a substantial user base ahead of any competition they have discouraged take up by trying to rip off potential customers. Most people will hold off until there is some competition to bring down prices and provide more attractive tariffs. EE will lose the business.

By Manuel on 19 Feb 2013

Limited reception, sky-high tariffs, lousy data limits... it's a mystery alright

By luckyse7en on 19 Feb 2013

Another cynic might agree!

Mr Ockenden has probably put his finger on it.
IF EE were serious about gaining customers and locking them in to 4G then a "pile 'em high, sell 'em cheap" model would probably work better. This dragged Tesco to the forefront years ago, and allowed them to move their stores & customer profile gradually upmarket over the following years.

EE's 4G, in more general terms, seems like a completely pointless 'innovation' 99% of the time for all the reasons Mr Luckyse7en outlines.

By wittgenfrog on 20 Feb 2013

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