EE slashes LTE prices, warns on capex cuts

EE has upped the pressure on rivals in the UK LTE market by introducing a raft of measures including cheaper LTE tariffs, new pay-as-you-go LTE tariffs and plans to offer a "converged" bundle of LTE and home broadband services.

EE, which is owned by Orange and Deutsche Telekom, said it is launching a range of entry-level 4GEE 24-month plans starting at £18.99 ($31) per month including a smartphone. It significantly undercuts O2 UK and Vodafone UK, which charge £32 per month and £34 for their cheapest package including a handset, although both offer more inclusive data than EE.

The move by EE also comes ahead of 3 UK's LTE launch in December, which should see the first unlimited LTE data plans in the UK. MVNO Tesco Mobile is also now offering LTE services in the UK for an extra £2.50 a month.

Also on the table from EE is a new "converged" bundle for 4GEE pay monthly handset customers, who will see their mobile data allowances increased to 10 GB each month for no extra charge when they sign up to EE's home broadband service. In addition, EE announced the UK's first pay-as-you-go LTE service, and unveiled new LTE plans called 4GEE Extra, a series of 24-month handset plans starting from £26.99 per month with larger data allowances.

"We are launching new plans for light users, super users, regular users, data sharers and Britain's mobile workforce up and down the country," EE CEO Olaf Swantee said in a statement.

Furthermore, EE has unveiled plans for a home broadband service powered by its LTE mobile network that it sees as offering an alternative to rural households not serviced by fixed broadband services. The operator said further details will be revealed in due course, with the services expected to be introduced in November.

Additionally, EE said in November it will reveal more details on its plans to trial the latest LTE speed technology, offering theoretical peak speeds of up to 300 Mbps in London this year, with a wider rollout planned for 2014.

EE said its LTE network reached more than 60 per cent of the UK population in September, with plans to cover 98 per cent of the population by 2014. However, as it unveiled its new tariff and coverage plans the operator has also warned that it may be forced to reduce its investment in its LTE network if the government goes ahead with plans to increase the fees UK operators pay for some of their spectrum, according to the Financial Times. EE has confirmed the veracity of the report.

Currently, the operators pay a combined total of £24.8 million ($40.1 million) per year for 900 MHz spectrum and £39.7 million for 1800 MHz spectrum. Under the new proposals unveiled by UK telecoms regulator Ofcom, they would pay £138.5 million per year for 900 MHz spectrum and £170.4 million for 1800 MHz spectrum.

"There must be a balance between licence fees and the critical 4G network investment consumers and businesses are demanding to drive growth and jobs for the UK economy," EE said at the time. "The proposed increase in licence fees is excessive at a time when we are investing heavily in the rollout of 4G."

"The proposed fees are in line with analysts' expectations and with the amounts that operators pay for accessing spectrum in other countries," an Ofcom spokesperson told the FT. "The operators were therefore given significant notice and the proposals should come as no surprise. However, if they have arguments for why the fees should be less than proposed they can put them to us as part of our consultation process and we will take them into account in making a final decision."

For more:
- see this FT article (sub. req.)
- see this Daily Telegraph article
- see this Broadbandchoices article
- see this EE release

Related Articles:
Ofcom threatens fivefold increase in UK spectrum fees starting in 2014
UK and French operators jostle for LTE limelight
3 UK to launch LTE in December with unlimited data plans
EE crosses 100 cities covered with LTE, as rivals get on their marks
EE: LTE is reducing user reliance on Wi-Fi
O2 UK unveils LTE pricing, with focus on music, sport and gaming

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