Price War? 3 promises to undercut EE's 4G tariff
3 says it wants to boost competition in the nascent 4G market in the UK and will kick-start things by sparking a price war. 3's ploy is not to charge a premium for 4G services unlike EE (the company formerly and derisively known as Everything Everywhere) which, to date, is the UK's sole provider of a very geographically limited version of a minimal subset of LTE services in some parts of a few British cities. Ubiquitous it ain't, Expensive it most certainly is.
3 says a "free" upgrade to 4G will be a "standard feature" of it's smartphone tariffs when LTE is added to the 3 network "later this year". 3 also says that its "4G" service will be available on smartphones including the iPhone 5, the Samsung Galaxy SIII and the Nokia Lumia among others.
According to Dave Dyson, CEO of 3UK, "We’ve listened to our customers and thought long and hard about the right way to do it. As we add the next wave of technology to our Ultrafast network, we won’t limit Ultrafast services to a select few based on a premium price and so we’ve decided our customers will get this service as standard".
So, 3's pre-pay monthly subscribers with an iPhone 5 will pay between £34 to £44 a month for 3G/4G services dependent on the type of contract involved. They'll also pay up to £99 for a subsidised handset.
Those with a Samsung Galaxy SIII willl pay between £29 and £31 per month plus a one-off additional payment for a subsidised handset. £29 for the handset on the same type of contract.
3 points out that the unknown numbers of EE subscribers who have upgraded to 4G bundles and EE is being very coy about metrics) pay between £36 and £56 a month with the bill rising with the amount of data downloaded.
EE is widely despised by the other UK mobile operators because, they claim, it stole an unfair advantage on its competitors by pledging to launch LTE services in the autumn of last year in what was, essentially, re-farmed 1800MHz spectrum.
Given regulatory permission to do so, and despite a mighty chorus of complaints, EE effectively stole a march on its rivals and was able to charge its LTE "4G" punters more than it was charging for 3G/HSPA services. However, despite its "first mover" advantage, uptake of EE's 4G services was very limited with many users quickly complaining about price, dropped calls, poor hand-off and data caps set so low as to make many 4G apps and services unaffordable.
Last month EE's lowered its prices but it may be too little too late. The company's first mover advantage won't last for much longer and the price cuts are indicative of a determination (if not desperation) to lock new customers quickly into lengthy contracts before competition kicks in.