Pricing for the U.K.’s first 4G/LTE network, 4GEE, which is due to launch on October 30 was announced earlier this week but despite offering five consumer phone tariffs, and a variety of add-ons, there are no unlimited data packages at all. Yet the company does offer unlimited tariffs on its 3G T-Mobile brand (on the Full Monty tariff). Asked why it isn’t offering any unlimited packages, EE’s consumer CMO, Pippa Dunn told TechCrunch that truly unlimited data is something only a marginal “super techie” minority actually makes use of.
“You’ve got your super techie people… who would love nothing more than for us to have given unlimited data packages but for the vast majority of the 27 million who are our customers they don’t need it and if we’d had to price for allowing all of those techie users to be able to use as much data as they’d want your average consumer would really have suffered,” said Dunn.
“We’ve looked at what customers are using at the moment and on average an Orange customer on a £36 plan uses less than 500MB a month and those customers who are on unlimited plans on T-Mobile Full Monty on average use 1.5GB,” she added. “We don’t think [unlimited data is] necessary [for 4GEE]. The only thing that happens when you get an unlimited data plan is you attract the people who cane the network and that’s not great for any consumer.”
It’s worth noting that EE withdrew tethering on the T-Mobile Full Monty package, after originally allowing it — yet does allow tethering on its 4GEE plans. So it’s clearly not keen for bandwidth hogs to rain on its 4G (money-making) parade. At least not while it enjoys a six-month 4G monopoly. It also appears that T-Mobile uses speed throttling to manage (ie constrain) Full Monty users. It’ll be interesting to see if EE throttles 4GEE users, being as higher speeds are the USP of the 4G network (I’ve asked EE whether it will speed-throttle 4GEE users and will update with any reply. Update: EE has confirmed there will be no speed throttling on the 4GEE network).
“What will happen [if we offer an unlimited package] is you will get a cohort of customers who will use an enormous amount of data as a result of that. There will be customers on our network who are using 50GB of data a month… so you end up with customers who are basically making the service worse for all other consumers,” Dunn added.
The entry-level 4GEE consumer phone tariff costs £36 per month and offers 500MB of data. The highest data rate package offered is 8GB (for £56). To decide on these data tiers, Dunn said EE looked at the average data use of its 27 million 3G customers — adding that even the top 10 percent of T-Mobile Full Monty customers gobble less than 6GB of data per month on average, which is why EE chose an 8GB cap for its most expensive 4GEE package.
Since publishing the tariffs Dunn said EE is considering introducing some larger data add-ons (but its position on unlimited 4G remains ‘no way hosay’). “The one thing we are going to do as a result of all the feedback [ie criticism via Twitter etc] is look at the add-on packages because some people are saying… you’re just constraining my usage — so we’re going to look at whether we should build some bigger add-on packages,” said Dunn.
There won’t be any unlimited tablet-specific packages on 4GEE either. Dunn says this is also ‘unnecessary’ as iPad users use even less data than mobile users — being as most tablet usage is at home over Wi-Fi.
“The reason why unlimited data plans became popular in the [3G] marketplace was because customers didn’t know what data they were using and therefore the uncertainty of it meant they were worried potentially about going out of bundle,” claimed Dunn. “But we fixed that in terms of the way that we’ve set up these [4GEE] tariffs in that firstly a customer will be notified when they get to 80 percent of their data usage and if they go over their data usage they won’t be able to run up a large bill because it will prompt them to buy an additional data package so the need for unlimited tariffs just isn’t there.”
Of course the main difference between the 3G and 4G marketplace — apart from the obvious network technology differences — is competition. Or rather the lack of any competition for 4GEE until Spring next year (when Vodafone and O2 can start launching their 4G networks). Dunn said EE will “unquestionably” be monitoring data limits in future — not least because it will have to start monitoring what the competition is offering. “We operate in a very competitive marketplace, we are always looking at what customers’ usage is and therefore what’s the appropriate package to sell to them,” she said.
Dunn also conceded that data usage on 4G will “probably” be higher than on 3G but said she does not believe it will leap up hugely. “I think customers will find as a result of being able to do things quicker it will be a much more pleasurable experience and they are likely to end up using more data — however I don’t believe that they’re suddenly going to use ten times the amount of data. I just don’t think that’s credible. Because if you look at what you can do even with 500MB you can send 500,000 emails without attachments, you can send 1,000 emails with photo attachments, you can visit 500 simple sites or 1,500 content rich sites so you can do a lot of stuff with 500MB.”