Everything Everywhere launched Britain’s first 4G network in late October last year and it seemed like it was off to a modest start. However, it now appears that the number of early adopters was remarkably low.
EE shed more light on the number of customers in its quarterly earnings report, but it did not break down the figures to distinguish between 3G and 4G users. In spite of that, the numbers look bleak. EE added just 201,000 postpaid 3G/4G customers in Q4 2012, down from 250,000 in Q3 and 313,000 in Q4 2011.
Although the 4GEE network has been around for months it is still having a lot of trouble attracting new signups. One of the problems is that the network is still a work in progress. It covers just 43 percent of the population and it hopes to cover 55 by June, reports TechCrunch. Things are improving, but getting to 55 percent in three quarters seems rather slow.
The second problem is pricing. The service is still considered too expensive and the data plans are rather limited. The entry level plan offered just 500MB of traffic per month – the sort of traffic that, if you use the web enough to want 4G, could be easily swallowed in a day, or less. EE responded by increasing data tariffs on some plans and cutting the price of the entry level plan to £31 per month, which is still hardly a bargain.
Looking down the road, EE will come under a lot of pressure from new providers, such as Three. Three recently announced that it will not charge a premium for 4G once it launches its service, probably in the third quarter. What’s more, Ofcom recently opened new 4G spectrum for bidding and even more competitors are expected later this year.
With all that in mind, it is increasingly unlikely that 4G adoption will take off in 2013, at least not in the first three quarters of the year. However, more rivals will emerge toward the end of the year and increased competition should drive prices down. In addition, prices of 4G enabled handsets will tumble over the next few months. Most high end phones already feature 4G connectivity, which is not the case with affordable mid-range units.
We won’t have to wait too long to see them, either. The vast majority of ARM SoCs used in 2012 phones lacked integrated 4G. Qualcomm was a notable exception and 4G was a major selling point for some of its Snapdragon S4 chips, which were reserved for flagship phones. However, most next generation application processors will have LTE modems on board, drastically reducing manufacturing costs and making low-end and mid-range phones with LTE a reality.