EE slashes LTE pricing as UK spectrum auction gets underway

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EE aggressively cut the price of its entry-level LTE pricing plan the day before its rivals made their first bids in the UK LTE spectrum auction.

EE cut the price of its entry-level LTE plan as the LTE spectrum auction gets under way.

Consumers who want access to EE's LTE services can now sign a two-year contract with EE for £31 per month, a £5 saving on the original entry-level tariff. This subscription will provide unlimited UK calls and texts, and 500 MB of mobile data a month as well as the option to choose from a range of LTE smartphones for a one-off fee, EE said in a statement.

The company also unveiled a 20 GB data plan designed to appeal to heavy data users that costs £46 per month on a SIM-only basis, and £61 with a LTE handset on a two-year contract.

EE's price cuts are being seen as the company's attempt to potentially spoil the plans of its rivals that have registered to bid in the UK auction. The changes are also a preview of the likely competition once EE's rivals have acquired LTE licences and are publishing their tariff plans.

"EE's decision to offer both a relatively lower-priced tariff at the entry level and a plan with more data at the top end is clearly in response to customer feedback," Ovum analyst Matthew Howett wrote in a research note. "More importantly though, it is a pre-emptive strike aimed at its competitors who are soon to launch tariffs of their own once the long-overdue auction of LTE licences is completed."

Howett concludes: "EE was always going to have a difficult role to play being the first mover. However, its peers may be grateful for attempting to move away from an all-you-can-eat world for data to an attempt to monetise it. Offering a more generous (but capped), data allowance for 'super-users' is still consistent with that pragmatic move."

EE CMO Pippa Dunn, said: "It's our aim to offer consumers the most comprehensive range of LTE price plans. With these new options we're looking to not only make LTE smartphones even more accessible, but offer even greater value for the small number of super-users out there-- ensuring EE really does offer a package that's tailored for all customers' LTE needs.

EE has not disclosed LTE customer numbers, and responded to questions from the BBC that is was "very pleased with the customer response to the launch of EE's LTE service."

Meanwhile, bidding started for the UK's LTE spectrum auction, which will see the companies bidding for frequencies in the 800 MHz and 2.6 GHz bands. EE, Vodafone, Telefónica's O2 UK and 3UK are all bidding, as is BT, Hong Kong's PCCW and managed networks firm MLL Telecom. While the UK government has publicly said the auction is expected to produce £3.5 billion in revenue, analysts have estimated that the amounts raised could be between £2 billion and £4 billion.

For more:
- see this EE release
- see this Bloomberg article
- see this BBC article
- see this Ovum post
- see this Ofcom release
- see this GigaOM article

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