O2 customers in the UK can finally look forward to the operator beginning the rollout of its 4G network. The launch comes after an exclusive period during which rival EE operated its 4G service and established itself as the most visible provider in the market.
That said, O2’s entry into 4G won’t be without challenges.
EE used its exclusivity to become strongly associated with 4G among consumers. During that time EE also expanded coverage and increased speeds beyond what O2 will offer at launch, giving it a noticeable head start.
One important technical difference is handset compatibility. The iPhone 5 already supports the 1.8 GHz frequency used by EE, but does not support the 800 MHz band O2 will initially use. While Apple is expected to introduce updated iPhones later this year that may support the lower frequencies used by O2, Three and Vodafone, that change could arrive after critical early adoption decisions have already been made.
Observers have criticised O2’s rollout plans as underwhelming. EE is already live in 95 UK towns and cities, including Aldershot, Amersham, Aylesbury, Barnsley, Belfast, Berkhamsted, Billericay, Bingley, Birmingham, Blackpool, Bolton, Bracknell, Bradford, Brentwood, Bristol, Cardiff, Chelmsford, Chorley, Coventry, Derby, Dewsbury, Doncaster, Dudley, Edinburgh, Glasgow, Harpenden, Hemel Hempstead, Hitchin, Horsham, Huddersfield, Hull, Leatherhead, Leeds, Leicester, Letchworth, Lichfield, Liverpool, London, Loughborough, Luton, Lytham St Annes, Maidenhead, Manchester, Marlow, Newbury, Newcastle, Newport, Nottingham, Pontefract, Preston, Reading, Rotherham, Sheffield, Shipley, Slough, Southampton, Southend-on-Sea, St Albans, Stevenage, Stockport, Sunderland, Sutton Coldfield, Telford, Thame, Walsall, Warrington, Watford, West Bromwich, Weston-Super-Mare, Windsor and Wolverhampton.
By contrast, O2’s initial launch cities are London, Leeds and Bradford.
EE’s progress is reflected in its customer numbers: by the end of June it had around 687,000 4G customers and was projected to reach one million users by the end of 2013. EE has also announced plans to expand into additional major cities—Birmingham, Newcastle, Glasgow, Liverpool, Nottingham, Leicester, Coventry, Sheffield, Manchester and Edinburgh—before year end.
O2’s initial geography leaves regions such as the West Country without early 4G support, a point that will matter to many customers and businesses.
Beyond coverage, pricing and handset support are central competitive factors. O2’s 4G plans start at £26 per month. EE’s entry-level 4G plans begin at around £23 per month, and rival Three has positioned itself as highly competitive by offering 4G upgrades at no extra cost from launch with “all you can eat” data plans starting from about £12.90 per month. Given those options, O2 faces pressure to differentiate its 4G offering on value, speed, or services.
O2 will open 4G service in London, Leeds and Bradford on 29th August. The company will need to accelerate network build-out, expand handset compatibility, and present compelling pricing or features if it hopes to close the gap with EE and fend off competition from Three and Vodafone.
How do you evaluate O2’s strategy? Can it mount a strong challenge against established 4G rivals?