EE 4G tariffs will ‘force’ Vodafone and O2 to reassess pricing

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CCS Insight analyst Kester Mann also said EE’s new, lower, tariffs will offer Orange and T-Mobile customers greater incentive to upgrade to 4G

EE’s new 4G tariffs, which offer customers the technology from £18.99 on contract, are a “pre-emptive strike” against Three and will force O2 and Vodafone to reassess their pricing strategy, analysts have said.

EE today (October 16) introduced a series of 4G tariffs that allow customers to get 500MB, 2GB and 5GB of 4G data from £18.99, £23.99 and £29.99 respectively. The prices are a significant reduction from EE’s launch tariffs, which offered 500MB for £26 and 2GB for £41 (full story here).

Three has said it will launch 4G in the forth quarter of this year (October to December) without a price premium on 3G – meaning customers will be able to get unlimited 4G data from £15.

O2 and Vodafone launched 4G on August 29, with their plans both starting at £26.

CCS Insight principal analyst Kester Mann said EE’s new tariffs offer a greater incentive for Orange and T-Mobile customers (both companies are part of the EE brand) to upgrade to 4G.

He said: “In our view, EE’s move is a pre-emptive strike against 3, which intends to launch its 4G network in December 2013 with no extra charge. While EE is maintaining a small premium for 4G, it clearly looking to broaden its target market with more affordable tariffs.

“EE’s move into the heartland of Orange’s mid-tier pricing brings the end of the T-Mobile and Orange brands in the UK one step closer. The price differential between 3G and 4G access will narrow to just £2 per month, thereby offering greater incentive for customers to upgrade to EE.

“The move will also force Vodafone and O2 to reassess their 4G pricing strategy.

“By offering pay-as-you-go 4G on smartphones, EE is in a stronger position to give a major boost to its customer total. EE recently passed one million 4G subscribers, a figure already higher than any other operator in Europe.

Uswitch telecoms expert Oliver Folkard said: “After O2 and Vodafone launched to much fanfare in August, with lower entry level deals and much-hyped benefits, EE has raised the bar again with a raft of changes.

“The introduction of PAYG pricing [also announced today by EE] could help EE reach budget-conscious Brits who prefer to keep a tighter lid on their spending. The flexibility – people can pick and choose bundles of minutes, texts and calls – should also prove popular. And with 500MB of data, 100 minutes and 400 texts costing just £11 a month, 4G may no longer be unaffordable for light users.”

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