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The UK is about to get 4G LTE, the next generation mobile phone technology that offers internet browsing and downloads at speeds five times that of 3G. But the company set up to offer it, EE, a sister brand to Orange and T-Mobile, is about to set a precedent that may disappoint some: entry-level contracts that start at £36 per month for just 500MB of inclusive data, and no unlimited data option.
EE instead offers unlimited calls and texts with all of its service plans, along with a variety of movie- and music-download service options to sweeten the deal. This raises two questions: who's moving to a 4G data network to take advantage of unlimited calls (which don't utilise 4G speeds), and what's the point in having such fast access to data if users must carefully monitor how they use it? "The vast majority of our customers are using less than 500MB
[of data per month] today on Orange, and even on unlimited plans customers are using around a gigabyte," Marc Allera, chief sales officer for EE, told me this morning when I called to quiz him on the subject. "So our packages start at 500MB. For the vast majority of our customers that's more than enough."
I believe he's absolutely correct; 500MB for the average Orange customer -- today -- probably is enough. But what about tomorrow? With features such as the iPhone's iMessage and BlackBerry's BBM fast making regular SMS messaging redundant, and VoIP services and Skype making regular callings redundant -- not to mention the rennaisance of videocalling Apple is trying to pioneer with FaceTime over 3G -- unlimited calls and texts are hallmarks of a last-generation mobile service. That's not what EE will want to be seen as.
I believe EE is missing an opportunity by offering unlimited calls and texts with limited data, and not limited calls and texts with unlimited data. There was an opportunity here to turn over a new leaf in consumer data pricing, offering unlimited -- or at least highly generous -- 4G in order to net those users who have all but forgotten that "minutes and texts" exist.
However Allera argues that "for those customers...we offer a plan that goes up to 8GB [of data per month], which is eight times our average usage even on an unlimited plan".
It's a compelling offer, until you consider that this plan --
8GB of data per month with unlimited calls and texts -- costs £56 per month. That will seem like a needless expense even to a heavy user.
EE had an incredible opportunity on its hands: make the transition to 4G a way of capitalising on the transition away from regular texting and calling. How much could that £56-per-month plan have been with only 100-or-so calls and texts?
Early comments to Wired.co.uk suggest readers aren't impressed, with one writing to say, "EE are totally wasting their first-to-market advantage with pricing that few will accept."
But Allera is confident that customers' needs are being met. He repeatedly asserts that based on current averages, 500MB is enough for the typical customer, even on 4G.
Steven Hartley, principal strategy analyst at Ovum, agreed.
Speaking to me shortly after the EE prices were announced, he said, "There are very few people who need to use more than 1GB a month.
Unlimited appeals to very high end users and they're in a very small percentage."
To its credit, EE is not trying to pull the wool over any customer's eyes, either -- it isn't trying to capture people on a low tariff and then charge them for exceeding it. Instead, the company will first warn them they're getting close to that limit, and once they hit their limit their data will simply stop.
I can't say that's unfair.
In a nutshell, we're left with an interesting play about to hit the stage: EE believes the amount of data a customer will want to use on 4G is the same as 3G, and industry analysts agree. On the other hand, consumers are about to be armed with a way of eating through mobile data five times faster than they've ever been able to before, and at a time where more content and media is being streamed, cached and uploaded; at a point where more and more otherwise commoditised services are being funneled over wireless data networks.
It'll take some time to see how this match plays out, and although EE is doing its best to play fair by 3G rules, 4G could well be a whole other ball game.
This article was originally published by WIRED UK
