EE continues to gather rosebuds while it may - and that may not be for much longer.
Jul 25, 2013
According to the latest figures EE has signed-up 687,000 so-called '4G' subscribers and claims that it is on target to hit its self-imposed (and oft-trumpeted) target of a million users by December 31.
That's the upside. The downside is that ARPU has fallen (by a single percentage point, to £18.40, it is true, but that is probably a significant straw in the wind). EE's total subscriber numbers are down as well. Not good when the honeymoon express is about to ht the buffers.
The fact of the matter is that even if EE does reach the million punter mark by year end, it hasn't made the fortune it expected to make and soon it will face intense competition. For example, 3, the UK's first genuine 3G provider, has gone on record to say that it will "massively undercut" EE's tariff when it goes live with its 4G service later in the year. Other players are likely to do exactly the same.
Britain's mobile network operators remain angry that EE was given a head-start in the 4G race by the national telecoms regulator, Ofcom.
The regulator gave EE permission to launch an LTE service using its existing spectrum last year. The operator also secured 10MHz of 800MHz bandwidth and 70MHz of 2.6GHz airwaves in the recent Ofcom 4G auction, which EE says gives it 36 percent of the total spectrum available in the UK and “an unrivalled foundation for the future.”
Competitors were incensed by Ofcom's decision to award EE a de facto monopoly and they remain determined to exact revenge when the market is opened-up in the next couple of months.
EE has exploited its advantage by ramping-up to eye-watering levels the premium it charges for the privilege of subscribing to its services: levels that cannot possibly be sustained in a competitive environment.
Elsewhere, EE did itself no favours with consumers by charging a ludicrous £21 a month SIM-only tariff for a paltry 500MB of data usage in the full knowledge that research consistently shows the majority of 4G users will consume at least 2GB a month.
That said, EE hasn't lost all that many subscribers. It has 27.5 million users in total (including those on its fixed broadband offerings), 55 per cent of whom are on lucrative post-pay contracts. The company hopes and expects that these 'locked-in' customers will reduce churn rates and see ARPU increase in the near future.
EE's LTE service is now operational in 95 UK towns and cities but it is notable that in its breakdown of subscribers the company fails to publish the number of subscribers that can actually access and are actually using LTE services as opposed to those who are simply getting a better broadband experience.
Now that's a statistic that would mean something - and probably why it is not available.