EE “missed the point” with 4G pricing, analyst says

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Ovum analyst Emeka Obiodu said EE failed to make the most of its headstart with 4G by not being aggressive enough in pushing it, and pricing it at a premium to 3G

EE should have made more of its competitive advantage with 4G, an analyst has said.

The operator announced today that it has 318,000 subscribers to its 4G network, which is the only one in the UK and launched in October last year.

Ovum principal telco strategy analyst Emeka Obiodu said that although this figure demonstrated a “commendable” performance, EE could have missed its chance to gain a “massive” first-mover head start in the UK LTE market.

He said customer numbers could have been higher if EE had been more aggressive in pushing 4G, and if EE did not charge such a high premium. EE prices its 4G service at a £5 premium to 3G, which Obiodu said showed the operator had “missed the point” of 4G as it will not be a differentiator in future.

Obiodu said: “By demanding an LTE price premium, EE, and every other telco that has done so, assume that customers will pay extra for the privilege of using LTE. But that misses the point. LTE is an evolutionary technology, and is absolutely necessary for every mobile telco who wants to remain in business for the long term. But crucially, as every other telco is going to get it, having an LTE network will ultimately not be a differentiator.

“We [Ovum] have always maintained that EE would do a lot better with LTE if it had taken a more aggressive approach towards wooing customers. EE effectively has a monopoly on LTE in the UK and has achieved a commendable LTE network coverage.

“It also has a good LTE device portfolio. Accordingly, it had all the ingredients it needs to sew up the market before its rivals move in with their own LTE offerings. But by demanding a price premium, we believe the uptake, despite today’s commendable 318,000 customers, could have been higher.”

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