E-Plus low-cost data tariff could trigger German price war

Having accelerated the deployment of its high-speed mobile data network in Germany, E-Plus said that it planned to offer flat rate data packages from November 1st. This move has raised fears that other German operators will need to compete with E-Plus and trigger a downward spiral in data tariffs.

An E-Plus spokesman, Christian Schieven, said that the new offer would combine a range of smartphones and data packages for a single monthly fee together with a choice of voice plans. Bundled pricing would range between €11 and €30 a month, although BlackBerry's and iPhone's were not being included within the package.

According to E-Plus, the company has been able to launch this marketing campaign due to the additional 2.1GHz spectrum it recently acquired during the German auctions. This focus on the 2.1GHz band was part of the company's strategy to roll out cost-effective services to customers in the country, Schieven said.

"In contrast to the 800MHz frequency, every handset can work on it. Devices compatible with the 800MHz frequency will remain limited for some time and be high-cost. We focus on a specific customer group who in general try not to spend too much on their monthly bills," he added.

However, the aggressive plan hatched by E-Plus does contain a slight wrinkle--the offer will only be available in nine German cities, with coverage of others being rolled out during 2011.

Separately, KPN, the owner of E-Plus, has announced that its CEO, Ad Scheepbouwer, is to step down next April. His replacement will be Eelco Blok, a long-term KPN employee who has held numerous management positions since he first joined the Board of Management in 2004.

For more on this story:
- read Wall Street Journal (sub. req.)

Related stories:
E-Plus to build German mobile data market with cut-price offers
Rumour mill: E-Plus future in doubt
E-Plus trials HSDPA for rural broadband
No operator consolidation necessary in Germany, says regulator

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