Feature Article

February 19, 2013

EE Has a Temporary 4G Advantage: Can it Capitalize?

As Sprint discovered, sometimes an advantage in fourth generation networks does not have quite the business impact one might have expected. The U.K.’s EE might be experiencing something of the same issue with its own Long Term Evolution service, now available to about 55 percent of the U.K. population.

EE says it has “achieved 43 percent spontaneous awareness in two months and 43 percent pop coverage.” What EE is not saying is that 4G subscriber volumes are substantial.

To be sure, third quarter 2012 net new customer additions were higher than for the same quarter of 2011, but all the other quarters of 2012 saw fewer net new additions than in 2011.

The LTE network is new. It has only been available for marketing for a couple of quarters and is not fully deployed. Still, some might say the low usage allowances are a barrier to adoption.

Everything Everywhere got permission in August 2012 to use some of its existing 1800 MHz spectrum to provide 4G LTE in the United Kingdom, in advance of the LTE auctions that now are underway.

That obviously gave EE a head start in the marketing wars, as well as the ability to create the network before its competitors had a chance to respond.

But how much advantage EE will reap remains to be seen. Sprint found its several-year advantage in 4G did not last as long as it believed, nor did the advantage seem to confer as much value as Sprint had hoped for, as the first U.S. carrier to offer a 4G service.

The WiMAX-based 4G network arguably was helpful to some degree, but never allowed Sprint to reverse its fortunes in a significant way, and now Sprint has switched courses, abandoning WiMAX for Long Term Evolution, which has become the global standard for 4G networks.

EE might discover it is facing something of the same issue. It has a temporary monopoly on LTE service in the U.K. market, but all the other competitors are likely to catch up relatively soon. The issue is how much EE could gain in the interim period.

So far, though it is early to conclude anything definitively, the 4G LTE advantage does not seem to have created a significant momentum for EE.




Edited by Brooke Neuman


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