O2 UK unveils LTE pricing, with focus on music, sport and gaming

Two weeks after revealing its LTE launch date in the UK, Telefónica's O2 UK has finally provided more details about the actual plans it intends to offer. Like rival Vodafone, it is focusing heavily on inclusive content to drive sales, but it is also staying safe by matching the prices of existing operator EE.

Starting Aug. 29, O2 said it will offer LTE tariffs starting at £26 ($40.32 or €30.43) per month, with all plans including free access to 9,000 O2 Wi-Fi hotspots, unlimited voice calls and texts, "Priority Moments" mobile marketing opportunities and a range of "exclusive" content.

The SIM-only LTE entry price for consumers of £26 will come with 1 GB of data. The most expensive SIM-only plan for £36 a month will include 5 GB of data. Data bolt-ons will also be available at £6 for 500 MB and £10 for 1 GB.

For customers that also want a device with their plans, O2 UK is extending its new O2 Refresh scheme to LTE with plans ranging from £22 a month for 1 GB of data to £37 for 8 GB. O2 Refresh allows subscribers to decouple the cost of their device from their contract whenever they wish, enabling them to upgrade to a newer model at any time. Monthly device payments will range from £10 to £25 a month.

Details about O2 pay&go and mobile broadband tariffs will be unveiled soon, the operator added, while separate plans have also been unveiled for business customers starting at £21.67 for 1 GB of data on a 12-month contract for a SIM-only plan.

An important element of the consumer plans is O2's focus on exclusive content, which like Vodafone, represents a differentiator for the operator's LTE services as it bids to compete with EE. The operator said any O2 customer who signs up to LTE with O2 will get exclusive access to a range of music, sport and gaming content.

For example, O2 4G Tracks will be free for the first 12 months, while O2 customers will also have access to free Priority Sports videos and multiplayer games through an exclusive deal with Gameloft.

The O2 tariffs will hardly set the LTE market alight, as it playing safe by matching the price plans of its rivals. A recent report from research firm CCS Insight noted that European operators are still testing the water with LTE pricing models, with the preferred approach to charge a premium of €5 to €8 more compared to 3G services. However, CCS Insight stressed that operators will need to offer some compelling reasons to justify these premium: "So far, the limited rollout of LTE in Western Europe has seen just 1 per cent of post-paid subscribers move to the new networks," the firm added.

Content services are certainly a start, but more innovative tariffs and better ways of billing will be required further down the line as operators compete for LTE market share.

The UK market could get more interesting when 3 UK finally launches its services later this year, as the operator has previously said that it will include LTE in all existing and new price plans.

"However, we believe that offering unlimited access to LTE networks will be difficult to sustain in the long term," noted CCS Insight. "We expect 3 to carry out only a limited rollout of LTE that focuses on major metropolitan areas in support of its Ultrafast strategy, which encompasses LTE and dual-carrier HSDPA technologies."

For more:
- see this O2 UK release

Related Articles:
Vodafone speeds up LTE push with UK and Netherlands launches
O2 to cover 5M in the UK with LTE by end of August
EE: We're on track to hit 1M LTE users in 2013
EE turns up LTE heat ahead of rival launches, promises to double speed
Wanted: Operator to share market with 'lonely' LTE provider

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