O2 Says Its 4G Plans Are Better Value Than EE

O2 says its late entry into the UK 4G arena will not prove a significant disadvantage in the battle against EE, claiming its LTE service will prove more than compeititve when it launches on 29 August.

Ben Dowd, O2 business director, told TechWeekEurope the operator was unfazed by EE 4G’s nine-month head-start over its rivals, which has seen it secure 687,000 subscribers before O2 4G even launches.

“It’s quite interesting when you look at the number of 4G customers they’ve got,” he explained. “But when you look at the number of customers they’ve put on their base over that period of time, we’ve put on more customers than they have. On the business side of things, we certainly haven’t lost custom because of 4G over the last nine months.”

Product differentiation

O2 has not revealed any specific pricing for its consumer or business 4G price plans apart from the fact the cheapest will be £26 a month. This is more than EE’s basic price of £21, but Dowd says O2 4G will offer better value.

He cites consumer benefits such as music and Priority Moments as key differentiators, along with hardware and software bundles for enterprises. O2 recently rolled out Office 365 to its business customers and plans to create and develop its own applications, something it believes will be ideal for small businesses and startups.

“Our aim in all of this is to be competitive in pricing, but to deliver the differentiation and different experienced we can enable,” he said.

But such packages are useless if there is not sufficient coverage, and O2 4G is presently at a huge disadvantage. It will be available in just three cities – London, Leeds and Bradford – from day one, with ten more added by the end of 2013. In contrast, EE 4G has already reached 95 towns and cities, but Dowd promises progress will be swift.

O2 4G coverage

“We are launching in the three cities – that gives us access to around five million customers and we are committed to extending our network to two million per month,” he said. “We’ve also got this commitment with Ofcom to reach 98 percent of the population with 2G, 3G and 4G, both indoors and outdoors, by within two years of 2017.”

The Ofcom requirement was attached to the 800MHz airwaves that O2 won at the 4G spectrum auction earlier this year. It paid £550 million for the bandwidth, which is valued for the considerable range it offers.

However, O2 did not purchase any 2.6GHz spectrum, which has a more limited range but greater capacity, at the auction, but Dowd is adamant this will not harm the network’s performance.

“What we’ve got is a network that can give us better coverage, deeper coverage and broader coverage. We can increase our capacity by up to 30 times what it is today,” he claimed. “We took the view at the spectrum auction that the price of the 2.6GHz spectrum had gone beyond the cost of providing extra capacity by other means. We have a range of other options to increase capacity, including 2G, 3G and Wi-Fi.”

4G benefits

EE has set itself a target of reaching one million 4G subscribers by the end of the year, but O2 is not prepared to place a number on its own ambitions.

“There isn’t a specific number of customers we want on the 4G service as it’s not something you’d want to force anyone on to,” said Dowd. “We have a 30 day happiness guarantee where a customer can try out 4G and if it’s not for them for any reason, they can switch back to 3G.”

Part of O2’s plan is to simplify the language of the technology, demonstrating how it can change their business. It believes field workers such as engineers, care workers and police offers can all benefit, and will provide its customers with access to its in-store and online experts.

“It’s a bit of hand holding because generally people don’t always get the technology,” said Dowd. “Let’s face it, the vast majority of customers don’t understand what 100Mbps means.

“For us, 4G is a great enabler to achieve a digital Britain.”

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