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Q&A: EE defends its 4G price hikes

EE

By Barry Collins

Posted on 25 Oct 2012 at 07:00

EE's 4G tariffs, announced earlier this week, have provoked a furious reaction among PC Pro readers and the wider public.

The company's cheapest monthly tariff (with handset) starts at £36 per month and comes with a data cap of only 500MB - which a customer could exceed in just over five minutes if they downloaded data at the network's claimed speeds.

The move was largely derided on Twitter. One tweet, bizarrely favourited by the EE Twitter account, brutally states: "I hope @EE are not paying for sentiment analysis of their recent launch. I can tell them from free - terrible."

Pippa Dunn is the chief marketing officer for the network that currently has a monopoly on 4G services in Britain. We asked her to defend her company's pricing model.

Q. How can you justify the cost of your 4G tariffs?

A. We've looked at existing customer usage. At £36 per month on Orange, customers are using an average of 380MB per month. We thought we’d stick with £36 per month [for the base package], which is about £5 more than 3G. You're going to pay about £5 more for a similar amount of data.

It's interesting to note on that T-Mobile point that, on average, Full Monty customers use 1.5GB

Q. That's not true though, is it? You can't even get an unlimited package on EE. To get a package with an 8GB download package on EE costs £56 per month, which is £20 per month more than T-Mobile's (Full Monty) unlimited tariff, and that’s not even unlimited.

A. It’s a very different thing though. To coin a pun, it's like apples and oranges, it's not the same thing.

Q. What's the difference?

A. On EE you're going to get five times the speed, you're going to get a free film every single week with all the latest releases, you're going to get two-for-one cinema tickets, you're going to get clone phone, we're going to ensure that you don't get out of bundle on your data usage, so you're in control. No matter what you want to do, you can basically judge your usage.

It's interesting to note on that T-Mobile point that, on average, Full Monty customers use 1.5GB.

Q. Which would be £46 per month on EE?

A. Which would be £46 under what we do on EE, correct. So it's £10 more expensive at that level. But you're getting a whole load more value for it, you're getting five times the speed, and all those other additional benefits.

Q. But that's useless if you can get through that cap in five minutes. If you download at full speed on EE you'd be through that 500MB data cap in just over five-and-a-half minutes.

A. But the point is consumers aren't using it like that.

Q. Do your consumers not use BBC iPlayer, for example? That would be just over an hour of programming on that.

A. Yes, but don’t forget that we've also got unlimited Wi-Fi. Most customers when they get home will switch onto their home broadband.

The point is that we're trying to price this in a way where we can give the maximum amount of customers access to the 4G network at a reasonable price, and then the control mechanisms so they can choose what they want to spend.

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User comments

They're kidding, right?

Of course the CURRENT average downloads are relatively low. That's largely becuase coverage is patchy and relatively slow.

If LTE is as good as they say then we'll be online a lot more and there'll be much more traffic. They are not only greedy, but stupid.

By wittgenfrog on 25 Oct 2012

EE miss the point

Ms Dunn's answers show that EE are viewing 4G in 2G terms. That thinking completely kills off all of the potential new uses that 4G *should* bring to customers.

I think their expensive tariffs have more to do with a fear of killing off their 3G data golden egg.

Who cares about any of these other freebies they're offering? No-one!

Hopefully the introduction of competition next year will really shake things up but perhaps I shouldn't hold my breath.

In the meantime there's no way I'd go anywhere near such poor, outdated deals as EE are offering.

By SheffieldSteve on 25 Oct 2012

I think wittgenfrog is spot on when he says 'not only greedy but stupid'. If I have a choice of two identical tarriffs and one was offering free films, etc, that might sway me. But if they think I'm going to say 'Wow! Free films at only £56 per month' - what planet are they on? I don't think I pay that much for my Sky subsciption which comes with any number of movie channels.

I'd also like to point out that 4G is faster than many people's home broadband, so I wouldn't be switching to wi-fi when I got home unless some greedy corporation had seen fit to put a very low cap on my 4G connection.

By jgwilliams on 25 Oct 2012

That's a really poor set of "fob 'em off" answers

Reading EE's replies, it smacks of someone morally justifying why they ate all the chocolates without offering them to the other kids.

"Customers don't go through 500MB now, so they won't need to in future"
Really? Are you that naive?
That's like saying when you trade your bicycle for a family car, you won't drive faster than 20mph or take anybody with you because you didn't before!

They are making a very strong argument for re-nationalisation of the utility industries where, instead of competition, rampant greed rules the day.

By cheysuli on 25 Oct 2012

Why not seel people what they want?

"you're going to get a free film every single week with all the latest releases, you're going to get two-for-one cinema tickets"

Yes, but I don't want those.

Why force people to buy what they don't want rather than just selling them what they do want at a lower price.

I wonder if EE have come up with this bizarre pricing to ensure that they have time to adjust to the use of the new service and are not swamped by vast numbers of people suddenly using enormous quantities of data. amounts

By qpw3141 on 25 Oct 2012

Who actually needs 4G?

I honestly don't care about 4G.

If I'm out & about, all I want to do on my phone is check my emails, train times & maybe Facebook & Twitter (if I'm really bored..),

What I'd prefer is for them to sort out the current black spots in 3G coverage & I'd be a happy bunny!

BTW, I've never watched any of the films offered to me by Orange, most of them seem to be art house nonsense that only a select few would bother with.

By bronven on 25 Oct 2012

Lost the plot

[quote]You are getting five times more speed. I think customers expect to pay more for that.[/quote]

My home BB speeds doubling at no extra cost would mean - NO! Not interested.
What I actually want is a steady, reliable, and consistent mobile service with a 99.9% geographic coverage (not based on head count density)...

By Brettrowley1 on 25 Oct 2012

Wasted opportunity

EE could have taken customers off other networks all day if they had gotten this right. I was looking forward to switching to EE with a WP8 upgrade. I'll probably be staying with O2 now when I get my new phone. 500mb cap; really!

By stephen_d_morris on 25 Oct 2012

An Alternative Solution

What we all need is WIFI hotspots everywhere, tied to your various Broadband providers.Then these Mobile providers can go and whistle with their overpriced 4G coverage!

By Jaberwocky on 25 Oct 2012

Undermining their own sales pitch?

If they don't expect people to increase their data use, what's the point in subscribing to the 4G service?
There would be no point.

The networks are paying hundreds of millions of £££'s for the 4G licences, they have to get that money back somehow.
I just can't see prices coming down, even with competition.

By GoneWithTheWind on 25 Oct 2012

Just get a GiffGaff SIM on 3G

One of the cheapest unlimited, uncapped data deals around. From £10 pm.

You do have to pay up front for a SIM free phone though.

By GoneWithTheWind on 25 Oct 2012

They've missed a trick

EE have exclusivity over a desirable piece of technology, which doesn't come along every day.

What they should have done is price their 4G service so it competes with the other providers 3G services. Why wouldnt you upgrade then? You can get a contract thats the same price as your 3G but your getting 4G!

As it is, I cant see 4G in its current state being enough to fork out another ~£10 a month for limited downloads. That cost doesnt even include upgrading to an LTE handset. The uptake will be limited to the few people that dont have to worry about the cost, or people that REALLY REALLY want 4G (do you know anyone that REALLY REALLY wants 4G)?

A wasted opportunity.

By Ischaria on 25 Oct 2012

Paying more for the same!

Fact 1: you are not paying extra for 4G you are paying extra for more of the same. 4G is not fully rolled out so for the vast majority will be paying more for what you already get ie 3g/2g

Fact 2: Avergage usage is complete nonesense as it is distorted by the old lady who has a phone but only for incoming calls and emergencys (ie my mother) and the people who whould have been early adopters are most likely the heavy users.

Fact 3: Giving us "FREE" stuff last time I checked you have to pay a monthly fee above what you already pay to get "FREE" umm so maybe not "FREE"

Missed a real chance to destroy the competitions market much like Apple and the mini iPad did, left a real hole for another operatotor to under cut them, taken a far too much an short term view

By wroughtec on 25 Oct 2012

It is so obvious that EE are charging more for early adopters.

If they didn't have a monopoly they wouldn't be charging these prices.

I was in one of their stores yesterday & asked about the Wireless Pointer that was advertised in store offering 10Gb for £15/month. 'Ah no sorry sir, you only get 5Gb now'..

I'll stick to tethering my old Dell Streak for now and just restrict what I use.

By bigrob14 on 25 Oct 2012

Was going to get a new 24 month contract with EE until I saw the prices.

Not sure if the new 4G phones are going to be subsided under that contract but looks as if I'll be take the hit buying the phone up-front and stick with my current £10 a month 3G contract until 4G monthly contracts reach a more sensible price-point.

By zedbilly on 25 Oct 2012

Quelle surprise... (not)

... I thought they might pull off a stunt like this. They did exactly the same with the first network introducing HSDPA - but could I get it anywhere I needed it? Nooo...

I was a T-Mobile customer for 18 months 5 years ago and that was 18 months too long. Poor network coverage & bad customer service (no thanks). I was very glad to get out of contract as soon as I could.

Their tariffs are completely unrealistic and I'm very VERY glad I've stuck with Vodafone, who might not be cheaper, but have significantly better coverage and seem to know what they're doing.

Either way, I'd personally have a beefed-up 3G network that works consistently well, than some skeleton of a fast network that only works when you're standing under the transmitter.

I briefly paused before signing up for a 2-year contract with Voda, but now I'm very very glad I did!

By mrmmm on 25 Oct 2012

3G is fast enough for almost all realistic uses of mobile devices. Who really needs streaming HD video or 40mbps download speeds when they're out and about?

The only real advantage of 4G is that it permeates through walls better I believe? So no more sitting at your desk with one bar of coverage :D :D

In both these respects I find it hard to think their pricing is that extortionate.

By deejerox on 25 Oct 2012

Do they honestly think we're that stupid

"All we're trying to do is give customers as much choice and as much control as they need and want"

No, you're in business to make money - the mistake you are making is being greedy and not understanding your customers. People I know are generally looking for cheaper mobile tariffs, preferably topping out at £30 a month - especially when you double that for a husband and wife each month!

And as for "control" - the best control you can give me is none at all, i.e. an unlimited tariff that I don't need to worry about!

And 500MB data cap on 4G - REALLY???!!!

EE, can you pleas remove me from your mailing list. Think I'll stick with O2 thanks.

By smn1973 on 25 Oct 2012

EE's answers don't surprise me in the slightest, they want to extract the most money they can whilst they have a monopoly, sign up as many people as possible then stitch them up. My last two data bills from Orange have been at £10 per Mb (yes you've read that correctly) when I ring up to get it corrected they can offer no explanation as to why I get charge that amount. My other gripe with them is the slow speed of 3g around the area I live, even when in a full signal area, once again no explanation.

By colinday2 on 25 Oct 2012

SIM only is just as bad

Currently pay £10.50 for a sim only contract over 12 months. This gives 500mb per month. Equivalent on 4G is £21.

£5 per month extra would have been pushing it. Doubling the cost means hat EE have shot themselves in the foot. I've 11 months left on Orange before I go to a 4G provider elsewhere. (Been on Orange for many years)

By antnry on 25 Oct 2012

SIM only is just as bad

Currently pay £10.50 for a sim only contract over 12 months. This gives 500mb per month. Equivalent on 4G is £21.

£5 per month extra would have been pushing it. Doubling the cost means hat EE have shot themselves in the foot. I've 11 months left on Orange before I go to a 4G provider elsewhere. (Been on Orange for many years)

By antnry on 25 Oct 2012

The Real "Big Picture" 4G Story

Though with a Canadian slant, the following story is as true for the US, EU, OZ and elsewhere: http://www.techvibes.com/blog/post-commercial-broa
dcast-age-2012-10-24

By Tech_Head on 26 Oct 2012

@Tech_Head

Thanks for the link. Interesting article.

By jontym123 on 26 Oct 2012

What are they smoking?

So... 3 out of 4 early-adopting enthusiast users say 'No Thanks'. So, expanding that population wide, EE have at best 1 in every 100 current smartphone users interested in their new offering?? Maybe they just don't want any customers?!

Taking some of their points in the PCPro interview:

1) EE4G is way faster than my home 'Broadband', (potentially 20 times so upstream), so no, I wont be switching to WiFi at home/work.

2) When I had dial-up, I was using maybe 50MB every month. Now on ADSL, I used 50GB every month. If you give users a service thats faster they will use more data. EE4G provides users with LESS data than they can get for less money on 3G.

3) You are paying for more for less data on a network that can only offer you 3G across most of the UK

I was really looking forward to EE4G - but at those prices, it is a complete and utter RIP OFF - and I hope that some low up-take figures show them the error of their ways!

Nigel

By veletron on 26 Oct 2012

WOW..just...W.O.W

This is the perfect example of 'business intelligence' gone wrong. You have taken and analysed your customers usage and set prices with complete disregard for the human factor - I am betting that a lot of heads will roll after the pain of the bite in the ass subsides. I called EE twice this morning and after speaking with 2 different agents I was the one telling them what your price plans were! France Telecom and Deutsche Telekom (Owners of EE) have really lost touch with the public, really.

By WeeWeeFromEE on 30 Oct 2012

WOW..just...W.O.W

This is the perfect example of 'business intelligence' gone wrong. You have taken and analysed your customers usage and set prices with complete disregard for the human factor - I am betting that a lot of heads will roll after the pain of the bite in the ass subsides. I called EE twice this morning and after speaking with 2 different agents I was the one telling them what your price plans were! France Telecom and Deutsche Telekom (Owners of EE) have really lost touch with the public, really.

By WeeWeeFromEE on 30 Oct 2012

NOTHING NOWHERE!

Just so damn angry with you!!!

By WeeWeeFromEE on 30 Oct 2012

Talk about politicians answers

I see a bright career in politics for this PR person with the ability to evade answering the question, quote irrelevant statistics, patronise and mislead they show in this interview.

4G with 3G level and worse data-caps is pointless, and the prices are pure monopoly profiteering.

All of which means that I will be leaving EE and getting my 3G internet elsewhere when my contract expires end of next Feb. As I don’t wish to continue to do business with such an unethical company and it’s clear other companies will not be in a good position to provide better 4G offers by then, 4G is not ready for primetime this confirms it.

Anyone who would really need the increased bandwidth is kept of the network since it clearly can’t handle the load. While those who will don’t need 4G to open their emails are enticed with talk of streaming on iPlayer on their commute not realising how quickly they will hit their data cap with that, (meaning they practically can’t do it).

To paraphrase Rory from the apprentice this is “Shameful”…..

By econundrum on 1 Nov 2012

4G Internet I think not...not with these data caps

She twists and turns, like a twisty turning thing in this interview to paraphrase Black Adder.

Honestly it’s like a master class in evasion, and answering the question you want to not the one you were asked, often employing meaningless statistics.

Fact these data caps only allow you to put 4G to the uses you currently use 3G for e.g. download an email in 0.25 seconds rather than 1 second, worth £5 a month of anyone’s money I’m sure.

Fact with these data-caps you won’t be doing regular media streaming on the movie 2x 1 hour iplayer programmes in a month will hit the 500mb limit for example, is that a joke on the 4G mobile internet?

The 8Gb package should be the standard £36 package, with an unlimited package for £56. 8-10 GB would probably be average for those streaming on commutes.

By econundrum on 1 Nov 2012

Another thing

EE could get away with charging early adopters more with realistic data-caps e.g. starting at 8Gb and going up to unlimited.. But setting Data –caps as they are like 3G data caps, will put of the very people interested in early adoption.

I think this is a simple case of greed overcoming common sense, anyone who signs up to one of these tariffs at this stage mind you almost deserves to be taken to the cleaners by EE. Buyers beware…..

Oh and I don’t want gimmicky extras EE, I want a worthwhile, reasonably priced 4G mobile service. Shall we compare your package prices and data caps to wired broadband and phone packages….best not for your sake my Sky unlimited package with free overseas calls and UK calls, basic sky TV, unlimited broadband and up to 20mbps speed, costs less than you 500Mb limited deal…you think that’s realistic pricing EE, do you?

4G internet will be competing with wired in the future.

By econundrum on 1 Nov 2012

Pathetic

The average user only uses 380mb.

There's a good reason for that. They only have a 500mb limit and daren't get close to it, incase they run over and have to remortgage their house to pay the extortionate bill.

Even the EE advert shows streaming tv. (By the first advert break you'd be over the data limit)

I hope they fail miserably, or come to the real world and offer sensible prices.

By Levvv on 5 Nov 2012

Terrible Analysis

The CMO of EE is clearly out of her depth. She should understand that people only use 1.5GB because the f**king network is slow! if it was fast there would be more consumption!!! but yeah they have the monopoly so they can do what they want!!! Its not worth at this price point having an adrenaline rush for 5mins!

By Viktor123 on 8 Nov 2012

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