EE: Of course we're going to get 1m 4G users by the end of the year!
Brave numerical spinning by EE, but is it enough?
Everything Everywhere put a brave spin on its latest 4G numbers today and insisted it was on course for its goal of 1 MEEEELION users by the end of the year.
With its new LTE network criticised for being buggy, patchy, and wildly overpriced, EE has nevertheless found 318,000 punters to step up to the plate. These include switchers from other networks as well as Orange and T-Mobile customers who have been lured into upgrading to 4G.
EE boasted of 166,000 net additions, with the prepay/postpay a fraction in favour of the latter (now 53 per cent up from 49 per cent), who are of course more valuable to the network. But it didn't tout a sharp fall in prepay punters … or an overall decline in subscriber numbers.
As analyst Keith McMahon pointed out on Twitter:
all the talk this morning of ee and 4g. It is difficult to find on the pr or press but they lost 570k prepaid customers in the quarter.— Keith McMahon (@KeithJamesMc) April 23, 2013
at the time of the ee merger sept '09 they had 28.4m customers, now 26.4m and revenues are lower. plus they now have a strange brand.— Keith McMahon (@KeithJamesMc) April 23, 2013
Don't hold back, Keith.
That's the nature of spin, however - you bury the bad news. You can read EE's brief presentation (PDF) on their website.
Everything Everywhere has a brief monopoly on 4G until rivals enter the market later this year. EE rushed to market - it's only available in a few select cities and larger towns, although executives promised 55 per cent UK coverage by June. Its monopoly position tempted it into setting eye-gouging rates: £31 for 3GB and £36 for 5GB a month on SIM only, where you locked in for 24 months.
That's trivial to a business - but sharply felt by consumers. And one mistake which has rebounded on EE was entirely avoidable: the headline-grabbing £21/month SIM-only tariff which only allows 500MB of usage. Most subscribers use well over that, we've heard, with the monthly figure coming in much closer to 2GB. Which isn't surprising, since it's likely to appeal to professionals. But it does mean some nasty surprises in store for the unwary.
And the premium pricing is sure to be short-lived. Hutchison Whampoa's 3 has already vowed to wipe out the premium advantage, when it introduces 4G at the end of the year.
So is 4G waving or drowning? It actually looks far less grim when you compare it to the 3G roll out in the UK. 3 launched in March 2003; how did they do?
Like EE, 3 also set a target of 1m users within a year. It also opted for premium tariffs only on prepay for its network launch - and the message, too, was that 3G was a unique service, performing unique services such as video calling. And like 3, EE has chosen a pretty whacky 'outsider' brand.
But 3 also had a slow takeup in the UK. Six months later, 3 could only claim 155,000 punters. 3 then promptly performed a reverse ferret, and changed its tariff structure to go after budget punters. It became a value brand, after it launched its pre-pay offerings in January 2004. A year after launch it claimed its 1m target had been reached.
Both 3G and 4G also had coverage problems - 3 still only had covered 70 per cent of the UK in 3G nine months on from launch. Now, nine months from 4G launch, EE wants 55 per cent coverage. Plus ca change?
One area where LTE has an advantage is that the handset situation looks better than at the launch of 3G, or even 2G. For some, the GSM acronym was really "God Send Mobiles").
The Motorola A920, a 3G flagship in 2003.
This 212g monster boasted an amazing TWO hours of talk time
Even though DoCoMo had launched 3G in Japan two years previously, the first 3G handsets were still power-hungry and buggy. Operators warned it would be two years (ie, 2005) before they matched the talktime consumers expected from 2G handsets. In fact, it was probably 2006 before the two became comparable.
For 4G the picture is much better, largely because the USA has led this time round and thus US consumers have been the guinea pigs. EE launched with some attractive, but not cheap handsets including the iPhone, Galaxy SIII LTE and Nokia Lumia 920.
That said, 3G provided a huge differentiator over GPRS. You could genuinely do video calls - it's just that nobody ever really wanted to. You could browse the web at decent speeds, for the time, just nowhere near the speeds the phrase "mobile broadband" promised. EE has a few months to find some consumer propositions for LTE. It could be worse.
Finally, before you compared the two network launches, bear in mind that EE has an established footprint in the UK, whereas Three was entering an established market with four major players. It's much easier to upsell your existing customers than lure in new ones to an entirely new network. Particularly when you have a new, whacky brand. ®
Sponsored: Today’s most dangerous security threats