EE forced to backtrack on 5G data tariffs

It does appear EE has been forced into a rethink on 5G data pricing, as the firm launches an unlimited data offering to keep pace with rivals in the UK.

Like hamburgers at breakfast, the 5G tariffs didn’t look right to start with. The price points were too expensive for today’s cash conscious consumer who expects the world for tuppence. EE might have been first out of the gate to capitalise on the growing 5G euphoria and earn the right to boast about being first, but it has been forced to backtrack a little.

The only issue with being first is that you give everyone else a taste of what is on the table. Even if EE had nailed the proposition and priced it perfectly, it left the door open to be embarrassed by rivals to be undercut. If the aim of the game was to secure post-paid subs and look to long-term ROI, EE left itself exposed to a cheap shot.

That said, it has now seemingly rectified the situation.

When it first launched in May, prices were tiered depending on download limits. Not only did it not look practical, limits would be reached relatively easily, it was expensive. Admittedly the price of 5G devices were factored in, but with rivals presenting options which were easier on the wallet, a new approach was needed.

“If you want an unlimited data plan, you should get it on the UK’s best network, with the coverage and speeds that let you make the most of it,” said Edward Goff, Marketing Director at EE.

“Our new unlimited range offers customers the ultimate smartphone experience in more places across the UK than any other network, all with no speed caps and great swappable benefits like Amazon Prime Video and BT Sport.”

What is worth noting is that the unlimited offer for 5G-SIM only plans is still expensive.

MNO Price
EE £44 a month
Vodafone £30 a month
Three £22 a month
O2 Unknown

Each of the telcos have taken their own approach to data pricing. EE offers 5G SIM-only contracts for £44 a month in the most traditional manner. Vodafone has offered tariffs on speed tiers with the £30 a month tier offering the ‘fastest available speed’, which might vary dependent on where you are. Three is offering 5G connectivity for free for anyone who has an unlimited 4G contract. The £22 a month deal is SIM-only.

O2 is the only one not to release pricing for its 5G data tariffs, being the last to market, though it certainly has taken the opportunity to undermine the promising progress made by rivals.

Although few in the EE offices will be happy to backtrack and have a rethink on the unlimited plans, it does now look to be in a very competitive position. It is the most expensive, but it does have the best network and most consistent, high download speeds. If performance is the measure of success in the consumers eyes, EE is certainly hitting the right notes.

Another factor to consider is the ‘swappables’ element of these deals. For those who sign-up to a 12-month SIM-only deal on 5G for £44 a month, three ‘swappable’ content deals will be included. Each month, customers will be able to elect which bundled content services they desire, ranging from zero-rated video data or music, additional roaming locations, BT Sport or Amazon Prime Video.

The team could probably do with negotiating a few more partnerships as it does look a bit thin on the ground, though it is a reasonable offer.

What we are yet to see from EE is an aggressive push towards the convergence game. Executives have been giving the same presentation at conferences for years, promising a seamless connectivity experience for customers through mobile, broadband and wifi assets, though there doesn’t seem to be much activity on the marketing front to link-up these elements in one conclusive offer.

Either there is something in the pipeline or this is a case of negligence. The combination of EE mobile and BT’s wifi and broadband assets would create a connectivity offering few could dream to compete with. Three and Vodafone are plugging into the convergence game with their own fixed wireless access (FWA) offerings, but EE seems to be lagging here. The opportunity to make noise is there but the team seem to be enjoying the uncomfortable silence.

EE is arguably the market leader in the UK, though thanks to O2’s MVNO relationships it can claim to be the network with the most mobile connections running across it. With the unlimited offer, bundles, biggest and best network coverage and BT’s wifi and broadband assets, EE has an opportunity to nail itself down as the top mobile provider in the UK.

Trying to pick out the winner in the UK’s 5G race is starting to get very difficult.

EE grasses on Three UK for its 5G advertising

Three UK has run an ad campaign claiming its 5G network is the only ‘real’ one. Unsurprisingly other 5G providers are unhappy about this and at least one had complained.

The UK Advertising Standards Authority has been forced to take precious resource away from enforcing gender politics dogma to look into Three’s 5G ad campaign. The ASA confirmed to Telecoms.com that it has received six complaints about an ad by Three claiming to provide the only ‘real’ 5G, with one of them coming from BT.

We contacted EE, which provided the following statement: “Three’s claim to be the only real 5G network is entirely false, and deliberately aimed at misleading consumers. Our customers have been using real 5G since we launched the UK’s first 5G network, back in May.”

And, of course, we also spoke to Three UK, which gave us this statement: “Our advert is to inform consumers that we will offer the fastest 5G network, based on Three having three times as much 5G spectrum as any other operator. We are also the only operator to have 100 MHz of contiguous spectrum. ITU considers this the gold standard for 5G, enabling consumers to take full advantage of what 5G has to offer.”

It all seems to come down this 100 MHz contiguous block of spectrum and the value the ITU places on it in the context of 5G. Here’s a slide from a Nokia presentation titled Minimum Technical Performance Requirements for IMT-2020 radio interface(s) [i.e. 5G] that clearly state “The requirement for bandwidth is at least 100 MHz.” However it also states “The bandwidth may be supported by single or multiple RF carriers.”

Nokia IMT 2020 requirements slide

That caveat would appear to undermine Three’s claim that only its contiguous 100 MHz chunk meets the ITU’s minimum requirements. But when we put that to Three their spokesperson countered that, since carrier aggregation isn’t currently supported by 5G chipsets, that stipulation is irrelevant.

Three reckons this complaint is evidence that its competitors are worried about Three’s strong position in 5G spectrum, which is wonderfully ironic when you consider Three has spent a decade moaning about the opposite imbalance in 4G spectrum. Three is presumably OK with the situation now that things have apparently swung in its favour, so much so it was happy to provide us with a few slides.

The first offers a look at the current UK 5G spectrum situation, following the 3.4 GHz spectrum auction last year. Most of Three’s 5G spectrum is in the 3.6-3.8 GHz band, however, and we’re not sure what the ‘future’ bar signifies, but Three does seem to be at a distinct advantage. So much so that its competitors have apparent been moaning to Ofcom too, as quoted in the second Three slide. The last one represents the results of some Three testing, which is designed to show the unique download speed benefits of having 100 MHz of contiguous 5G spectrum.

Thee 5G slide 1

Thee 5G slide 2

Thee 5G slide 3

To be honest we find it hard enough to keep track of who has what spectrum, and why we should care, so we’re certainly not in a position to critique Three’s claims on a technical level. However they do seem to serve as a plausible defense of any claim it might make to have at least the potential to provide greater 5G download speeds than its competitors.

Where we still have some sympathy with the ASA complaint, however, is with the use of the term ‘real’. If Three had simply gone with ‘fastest’, as it did in the above statement, then EE probably wouldn’t have a leg to stand on. But by instead using the term ‘real’ Three seems to inferring rival 5G services are somehow illegitimate.

It will be down to the ASA to sift through the 5G standard, including the above ITU parameters, to determine whether or not only a 5G service that is able to call upon at least 100 MHz of contiguous qualifies. Since the ASA seems more concerned with thought policing these days we have to question whether it has retained the expertise needed to perform its supposedly core function.

Three goes live with 5G broadband service

UK telco Three has become the latest to join the 5G bonanza with the launch of its 5G Fixed Wireless Access (FWA) service in London.

With plans to launch the service in 25 cities throughout the UK, the FWA proposition looks to be a challenger to traditional broadband services. We have been told the new service will promise speeds of 100 Mbps between the hours of 8pm and 10pm, peak times for streaming in the living room, offering an alternative to fibre broadband for speed hungry customers.

“Three’s 5G is going to revolutionise the home broadband experience,” said Three CEO Dave Dyson. “No more paying for landline rental, no more waiting for engineers, and even a same day delivery option. It really is the straightforward plug and play broadband that customers have been waiting for.

“We’ve taken a simple approach with one single truly unlimited data plan to give customers the opportunity to fully explore 5G and all its exciting possibilities. The ease and immediacy of it all means home broadband using 5G is going to be key to the future of the connected home.”

Looking at the deal offered, there are some interesting elements. Three is promising a ‘plug and play’ experience, meaning customers will no-longer have to wait for an engineer to start the service, while contracts can be taken to new homes if the customer moves. This of course depends on whether Three has launched 5G in the new area, though removing the dependence on physical lines into the home can offer some benefits.

Although this does look like a promising opportunity to disrupt the traditional home broadband market, questions still remain over the long-term viability of FWA as an alternative to the delivery of connectivity over physical infrastructure.

There is a business case for FWA in the remote regions, where the commercial attractiveness of connecting ‘the last mile’ with fibre falls dramatically, though these are not the areas which Three will be targeting to start with.

The launch today is in certain areas of London, while Three is promising to connect 25 towns and cities by the end of the year. These will most likely be the more urbanised areas, this makes commercial sense after all, perhaps targeting regions where fibre penetration is lacking.

As Heavy Reading Analyst Gabriel Brown points out, £35 a month is not overly aggressive pricing, and the 100 Mbps download speeds are very achievable. Users might experience higher speeds during the day, though the proposition might well be more attractive financial and performance wise than many cable services today.

This is where Three could find its appeal. As Brown points out, accessibility to fibre services is a challenge today in the UK. If Three is able to target the regions where Openreach, Virgin Media and the fibre ‘alt-nets’ are missing, there could be a tailored audience for the speedy and reasonably priced 5G FWA service.

Played smartly, Three can drive additional revenues through the business. And while Three does already have 800,000 broadband customers with its 4G FWA service, this could be a notable driver of new revenues for the business. 5G network deployment is going to be an expensive business, therefore sweating the assets in every way possible will be an important factor.

This product opens up a new world for the challenger brand. Over the last few years, subscriber growth in mobile has been relatively flat, though should Three push towards the convergence game, there could be new opportunities to engage new customers with a new message.

Solid if unspectacular results for Three UK as it prepares for the 5G era

Three UK has unveiled its financial results for the first half of 2019, and while it is nothing to shout and scream about, the bigger prizes are coming into view on the horizon.

Revenue might have decreased by 2%, but that is nothing to worry about when you look at the bigger picture. Subscribers are increasing, net promoter score is on the up, margins are remaining consistent and the enterprise business unit is demonstrating steady growth. 5G is on the horizon and Three is in a healthy position to demonstrate growth.

“We’re pleased with the progress we’re making going towards 5G,” said CFO Darren Purkis. “Feel we’re setting up the business well for the launch in the second half of the year.”

This might have been a bit of a tricky period for the Three business to navigate, as while it has a reputation for disrupting the status quo and playing a different ball-game from its rivals, it has been relatively quiet over the last six months. There have been no antagonistic marketing campaigns and little wow factor to report. Three has its eyes set on the 5G era and all announcements have focused on the preparations.

Currently the UK is sitting in the calm before the storm. EE and Vodafone might have launched their 5G networks already, but the marketing A-Bomb has not been dropped yet. We suspect over the next couple of weeks there will be a marketing blitz as Three and O2 prep themselves to launch; you won’t be able to suck a polo without being bombarded with 5G messaging before too long.

Looking at the financial side of the results, Purkis highlighted there was no reason to be concerned about a slight revenue dip. More customers have been migrated to unlimited data tariffs, removing charges for exceeding data bundles, while international calling regulations have changed, and new accounting principles have been applied. Revenue might have dipped, but the margins have remained.

When talking to Three today and over the last couple of months, the tone has been much more reserved than in previous years. This is a company which is prepping for 5G and there will be much more excitable spokespeople and marketing campaigns when the network is up-and-running.

On the network side, the Nokia 5G core is running and the team are migrating customers onto the new network. IT transformation has continued, as CAPEX increased by 23% over the first six months, and the launch of 20 data centres around the country will shift the mobile experience closer to customers. Three has regularly been criticised for having a poor network in comparison to rivals, though few can say it is doing nothing about it.

This is one perception which will have to be addressed if Three is going to be a major force in the 5G world, though all the signs are looking positive.

“Three’s results held few surprises as it reported a solid if unspectacular performance during the first half of the year,” said Kester Mann of CCS Insight. “The number of active customers nudged up just 1%. This glacial growth illustrates a leading reason why Three sees 5G as a catalyst to reinvigorate its brand and achieve the scale it has long for craved.

“Given its strong position in 5G spectrum – a major advantage over rivals – Three was understandably keen to talk up its 5G credentials once again. When it launches later this month, expect it to focus on unlimited data, low prices and disruption in home broadband.”

Purkis highlighted consumer mobile will remain the core focus of the business moving forward, it is known as the brand for data-intensive users after all, though there are other opportunities to be aware of.

In the home, the 5G FWA offering presents a significant threat to the traditional broadband service providers, demonstrated by the 4G FWA offering which the company already offers. Three currently has 830,000 home broadband customers, a number which could very much increase as increased speeds are offered over the new airwaves.

This diversification to the core mobile business was brought about by the acquisition of UK Broadband in 2017, though it has also offering them a glimpse into the world of enterprise business services.

Enterprise business services represents a very small aspect of the overall Three business now, but this is a big opportunity for the team. With UK Broadband as part of the Three family, the team is learning the tricks of the trade, and in September, Mark Stanfield will join as MD for Enterprise Services adding to the momentum. Stanfield’s role will be to set-up a more complete enterprise business function, which will include more attention for the wholesale segment.

Once again, the consumer business will continue to be the core of Three’s activities, but there are opportunities to attract more revenue through enterprise services. Currently the team are focusing on Small Office and Home Office (SOHO) customers, businesses no-larger than nine people, though once a firm foundation has been created here the team will look to engage larger businesses.

Another opportunity which is being evaluated in the UK Broadband business unit is for private campus networks. UK Broadband MD Ros Singleton is leading the charge here, and while the team currently manages a number of different networks already, it is actively engaged in various tender processes to expand the footprint.

The financial results here are nothing to write home about, but this is a business which is in preparation mode for the 5G era. We suspect there will be bigger things to come here as Three has crafted a position and collected assets to mount a considered challenge to its three larger rivals.

Unlimited data is inevitable with 5G, but try telling operators that

We’re quickly moving into the 5G era and many assume the concept of unlimited data bundles will be commonplace, but how will the telcos fare in this new world?

As it stands, the telcos are under pressure. This is not to say they are not profitable, but many shareholders will question whether they are profitable enough. Tight margins and a squeeze on core revenue streams are common enough phrases when describing telco balance sheets, but this could get a lot worse when you factor in unlimited data packages.

As Paolo Pescatore of PP Foresight pointed out, when you offer unlimited data you are effectively killing off any prospect of revenue growth per subscriber in the future. In some markets, there are still fortunes to be made, but in some, such as the UK where 4G subscription penetration is north of 100%, where are you going to make the growth revenues from when consumers are demanding more for less?

More consumers are seeking unlimited or higher data allocations but are not willing to pay for the experience. Some MNOs might be able to resist, but the more rivals who offer such tariffs the more the rest will be forced into line. It’s the race to the bottom which is profitable in the short-term, but growth will end quickly. The price per GB is only heading one direction and unlimited data allocations will end the prospect of upgrading customers.

O2 fighting for air

This is the conundrum which the telcos are facing in the UK right now. All four have announced their 5G intentions and all four are promising big gains when it comes to the next era of connectivity.

Starting with O2, the only one of the four MNOs not to have released 5G pricing to date, this is a telco which looks to be in the most uncomfortable position. Over the last few quarters, the management team has boasted of increased subscriber numbers, but this can only go on for so long in the consumer world. Soon enough, a glass ceiling will be met and then the team will have to search for new revenues elsewhere.

This is of course assuming it plans to go down the route of unlimited data, it might want to stick with the status quo. That said, if everyone else does, it will not be able to fight against the tide for fear of entering the realm of irrelevance.

The issue here is one of differentiation. The idea of attracting new customers by offering ‘bigger, meaner, faster’ data packages will soon end and telcos will have to talk about something else. O2 does have its Priority loyalty programme, but with rivals launching their own version this USP will fade into the noise.

Differentiation and convergence are two words which have been thrown around a lot over the last few years, though O2 has thus far resisted. Last year, CEO Mark Evans suggested he was not bought into the convergence trend and would continue as a mobile-only telco, though this opinion does seem to be softening.

If O2 is going to be competitive in the almost inevitable era of unlimited data, it will have to source growth revenues from somewhere. It is making a push into the enterprise connectivity world, which will bring new profits to the spreadsheets, though does it want its consumer mobile business to stand still?

Bundles of fun

This is where the other telcos in the UK have perhaps got more of a running start in the 5G era. EE has its connectivity assets in broadband and wifi to add value, as well as a content business of some description. Three is already known as the data-intensive brand, while its FWA push will take it into some interesting connectivity bundling options. Vodafone also has FWA, a fibre partnership with CityFibre and is arguably the leader in the enterprise connectivity market. The rivals are offering more than mobile connectivity as a stand-alone product.

Looking at Vodafone to begin with, the recent announcement is certainly an interesting one. The innovative approach to pricing, tiering tariffs on speeds not data allocation, will attract some headlines, while it is also super-charging its own loyalty programme, VeryMe. It has secured content partnerships with the likes of Sky, Amazon, Spotify and gaming company Hatch, while its FWA offering also includes a free Amazon Alexa for those who sign-up early enough.

Combining the FWA product or its fibre broadband service, courtesy of CityFibre, also gives them the ‘connectivity everywhere’ tag, a strength of BTs in recent years, to allow them to communicate and sell to customers in a different way. Perhaps it is missing a content play to complete the convergence bundle, but it is in a strong position to tackle the 5G world and seek additional revenues should the unlimited craze catch.

The same story could be said of Three. With the acquisition of UK Broadband, it has forced itself into the convergence game and kicked off the ‘race to the bottom’ with an unlimited 5G data offer. As long as you have a Three 4G contract, you can get 5G for no additional cost, assuming you have a 5G compatible phone of course.

Three’s strength and weakness lies in its reputation. It is known for being the best telco if you have an insatiable data appetite, this works very well for the 5G era, though it is also known for having a poor network. Three regularly features at the bottom of the network performance rankings, especially outside of the big cities where it has not done nearly enough to satisfy demands.

This will of course change over the next couple of months. Three is working to improve its network with additional sites and a new Nokia 5G core, however it will have to do a lot to shake off the reputation is has acquired over the last few years.

EE is perhaps the most interesting of the four. It has lost its position as the market share leader when it comes to 4G subscriptions, but it does have the reputation for being the best in terms of performance throughout the country. It is regularly the fastest for download speeds, but its 5G pricing is by far the most expensive to be released so far.

That said, with the BT assets it has for wifi and broadband, as well as the content options, there is plenty for the consumer to be interested in. Should BT be forced to readdress the pricing conundrum, it might not have the fear regarding a glass ceiling on revenues as there are plenty of other products to engage the consumer. It will be able to find additional revenues elsewhere.

MVNO no you didn’t

Outside of the MNOs, you might also start to see some competition. MVNOs are nothing more than ‘also rans’ today, but Sky has officially entered the 5G race. This is an interesting competitor, one who could cause chaos to the status quo.

Firstly, understand mobile is not the primary business for Sky. This is an add-on, where it is seeking to drive additional revenues and attract more customers through bundled services. It is the leader in the UK when it comes to premium content and has a thriving broadband unit also. Sky can add services on top of connectivity to make itself seem more attractive than the traditional mobile service providers.

Then again, there are only a couple of MVNOs who can pose this challenge. Sky is one, while there are persistent rumours Amazon wants to get involved with the connectivity game and Google has its own Fi service. These are also companies who are at the mercy of the MNOs in terms of the commercial agreement with the MVNOs, so damage is likely to be limited unless one network owner decides to go down the wholesale infrastructure route.

But you cannot ignore these companies. They are cash-rich, constantly searching for new ways to make money and have incredible relationships with the consumer. They are also the owners of platforms and/or services which are very attractive to the mass market; bundling could be taken into a new context with these firms.

Diversity is our strength

This is of course only looking at the services which are common throughout telco diversification plans today, there are other options. Orange has launched a bank, has experimented in energy services and is making a move towards the smart home in partnership with Deutsche Telekom. Over in Asia, gaming is an important element of many telcos relationships with consumers and this trend is becoming much more prominent in the European markets also.

Elsewhere, the smart home could certainly offer more opportunities for telcos to add-value to an emerging ecosystem, while the autonomous vehicles offers another opportunity and so does IOT. The issue which many of these telcos are facing is competition from the OTTs. Arguably, the battle for control of the smart home might already have been won by the OTTs, though the same could be said for autonomous vehicles and IOT.

In many of the emerging segments, telcos will remain a connectivity partner though they certainly need more than that. This will remain a consistent stream of revenue, though it will also sleepwalk telcos to utilitisation. In IOT, as an example, the major cloud players are crafting business units to engage enterprise businesses for edge and IOT services; this is a market which the telcos would love to capitalise on for both enterprise and consumer services.

Security is another which is increasingly becoming a possibility. The concept of cybersecurity is generating more headlines and consumers are becoming more aware to the dangers of the digital world. Arguably, the telcos are in the strongest position to generate revenue from this segment; there is trust in the brand and they have largely avoided all the scandals which are driving the introduction of new regulation.

Unlimited data is certainly not commonplace today, but with the services of tomorrow promising to gobble up data at an unfathomable pace, it would surprise few to see more people migrating to these tariffs. The question is how you make money once you have migrated everyone.

Diversification and the acquisition of new products is not a simple task, but then again, it is becoming increasingly difficult to imagine how single revenue stream telcos will be able to survive in the world of tomorrow.

 

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Three set to cause more disruption with 5G pricing plans

EE is finding out first is not always best as Three is set to join Vodafone is offering more attractive 5G data tariffs.

When EE first launched its 5G tariffs earlier this year, it was as everyone would have expected; the MNO charged a premium, and a lofty one at that, the 5G connectivity. Vodafone undermined this position with an innovative approach, tiering on speeds not data allocations, and now Three will go one step further offering access to 5G connectivity at no extra cost to a customer’s 4G connectivity plan.

All new and existing customers will have access to 5G with no speed caps and at no extra cost on all contract, SIM only and PAYG mobile plans. There will be data caps if you have currently have a cap on your 4G plan, however SIM-only unlimited data plans start at £20 per month.

“The forthcoming months are going to be game-changing and with our unrestricted plans, we are looking forward to unleashing the full potential of 5G to all,” said Three CEO Dave Dyson.

The approach is a sensible one from Three and leans on the strategy put forward by T-Mobile in the US. 5G is currently seen as somewhat of a bonus for customers right now, due to the limited geographical coverage of the airwaves. Offering 5G connectivity for free will certainly attract some customers, who will just have to worry about getting a 5G compatible device.

“Three’s hand was likely forced to some extent by Vodafone’s initial disruptive and unexpected pricing strategy for 5G,” said Kester Mann of CCS Insight. “But its enviable spectrum holding places it in a commanding position to undercut any rival.

“More than for any other UK operator, 5G is crucial to Three. It represents an opportunity to reinvigorate the brand, overcome a negative network perception, achieve the scale it as long-for craved and push into other segments such as convergence and enterprise.”

This is where Three will have to be careful. With more of society migrating to digital, consumers will come to expect a more resilient and consistent experience from connectivity providers. This is where Three has fallen down in recent years.

In the latest Opensignal report, Three was battling it own for last place with O2 in the majority of the categories. It had the lowest availability scores, poorest for video experience, second-slowest on speeds and worst for latency. This will not be good enough in the 5G era and if this trend continues, it would not be surprising to see Three lose market share.

Three might have been able to disrupt the market on price during the 4G era, but that will not be enough to mount a serious challenge to market share in the 5G era. Consumer expectations will shift across to availability and experience soon enough. Three has an opportunity to make a genuine impact on the status quo, but it needs to kill off the perception (which has often translated to reality) that it has the worst network in the UK.

The stars do seem to be aligning for Three. Pricing looks to be right, it has the best spectrum out of the four MNOs, the UK Broadband acquisition has set it on the convergence path and its traditional customers are perfect for the 5G era. If it can create a network which competes with the best in the UK, the next couple of years might be a very interesting quest for Dyson and his cronies.

Three UK claims 5G-ready cloud core first ahead of August launch

Even though it won’t be flicking the 5G switch until next month, Three UK has decided to bang on about its new virtualized core once more.

We first heard about this whizzy new core, that has been built in partnership with Nokia, back in February. At the time we assumed that would be the last we’d hear about it until the formal launch of Three UK’s 5G network, but Three seems to think we need just one more teaser first.

So, once more for those at the back, this is all about actually using this virtualization tech we’ve been hearing about for so long to make a secure, scalable, flexible core that is capable of fully delivering the 5G dream. It will be housed in 20 dedicated data centres scattered around the country to deliver edge computing benefits such as lower latency. This is also a good case study for Nokia to show how good it is at this sort of thing.

“Our new core network is part of a series of connected investments, totalling £2 billion, that will provide a significant step change in our customers’ experience,” said Dave Dyson CEO of Three UK. “UK consumers have an insatiable appetite for data as well as an expectation of high reliability.  We are well positioned to deliver both as we prepare for the launch of the UK’s fastest 5G network.”

“This is an exciting time for both Nokia and Three UK, as together we work towards the future of telecommunications networks,” said Bhaskar Gorti, President of Nokia Software. “This project delivers a joint vision that has been forged from the catalyst of Three’s strategy for complete business transformation. The project will deliver a flexible 5G core network, enabling the next generation of mobile services and cementing Three UK as a true leader of 5G in the UK.”

Three was careful to give shout-outs to some of its other partners in this project, which include Affirmed Networks for traffic management, Mavenir for messaging and Exfo, Mycom and BMC for OSS. Not only will this core network be central to Three UK’s strategy for the next decade, it will also provide a good live test of the kinds of technology everyone will be reliant upon before long. No pressure then, see you in August.

US is winning the 5G speed race

Although there is a lot more to 5G than ‘bigger, faster, meaner’ download speeds, the US has bragging rights currently when it comes to the fastest download speeds.

According to the latest analysis from Opensignal, 5G is boosting maximum downloads in all eight markets where the connectivity euphoria has been launched, aside from Australia that is. It’s a very crude measure of success, but it is something which the telcos will want to shout about.

As you can see from the graphic below, there is certainly an increase in speed, though this is hardly a good measure when you consider very few consumers even touch the maximum speeds promised.

Opensignal graphic

Leading the pack is the US with maximum downloads speeds of 1815 Mbps, and by somewhat of a clear margin, though both Switzerland and South Korea have entered into the holy land of gigabit speeds. Perhaps the strangest statistic to make note of is the decrease in maximum speeds in Australia.

The lead which the US has established should come as little surprise when you consider the spectrum being utilised. Telcos in the US are already able to use mmWave spectrum for 5G, whereas European counterparts are utilising the mid-band spectrum, which sacrifices some speed to improve geographical coverage.

Looking at the UK, which currently sits bottom of the rankings, there is perhaps something for Three to shout about. Opensignal suggests speeds here might be impacted by the fact EE only has 40 MHz of relevant spectrum. Three has been shouting about its 100 MHz of contiguous spectrum in the 5G bands, claiming it is best positioned to deliver the 5G experience, and this analysis perhaps supports this claim.

And to address some of the speed differences between Opensignal and the figures which are being quoted by the telcos, this analysis is being done in the real world. Consumers are asked to download the Opensignal app, allowing the team to assess speeds in the real-world, with a range of different devices (manufacturer and condition) and a variety of applications.

But you also have to take into account these speeds are not realistic whatsoever; its nothing but a PR plug for the ‘creatives’ in the marketing department to make use of. Let’s take Australia as an example.

According to this analysis, Australian telcos can achieve a maximum download speed of 950 Mbps for 4G. However, as you can see from the graphic below, reality is far from the maximum achieved in perfect test conditions.

Opensignal 4G graphic

Although we are comparing apples and pears here, the theory is the same. Real-world experience is entirely different from the maximum speeds which the telcos boast about; this has been true for the 4G world and it would be perfectly reasonable to assume the same for the 5G era.

Fundamentally, this means very little for the moment. Coverage is incredibly limited while reality will be very different when more users hit the network. You also have to take into account European operators do not have access to the high-band spectrum which will deliver the monstrous speeds promised.

That said, the variety of speeds perhaps give an indication of the success of deployment strategies. It is certainly early days in the 5G era, but the US has claimed the first accolade when it comes to the dated ‘bigger, faster, meaner’ mentality which has governed the telcos for years.

Three UK has a great 5G opportunity but needs to do some growing up first

Three is positioning itself to fully exploit the 5G opportunity, but you have to wonder whether it can deliver the high standards it is setting itself by just repeating what it has always done.

“We are going to take 5G by storm, we believe it is ours to own,” said Shadi Halliwell, CMO of Three UK, at a London briefing this week.

There is certainly an element of truth to this statement; the UK connectivity market has pleasantly evolved into the environment which will allow Three to flourish. Data is king as we head towards 5G and with the on-going challenges in delivering broadband which meets consumer expectations, the conditions are ripe for disruption.

Three has always sold itself as a brand designed for the data-intensive consumer and this is the promise of 5G for the moment. Without Release 16 from the 3GPP, 5G is little more than upgraded 4G, but this won’t matter for Three. The brand proposition is already well established and 5G allows the team to double-down on this position.

There are a lot of other factors which will help the team here also. The telcos has never been shy about hyping its contiguous 100 MHz of spectrum, or that it is has a greater horde of assets than its competitors. Being late to market also might help, taking a bigger picture approach than rivals seeking to win the ‘first’ tagline.

But if Three is going to be a serious competitor, it has to evolve its image.

Chasing after the data-intensive consumers is all well and good, but this is only one segment. Presenting itself as a challenger to the status quo is all well and good, but it doesn’t create a sense of robustness and heritage. Colourful marketing campaigns and undermining competitors with cheeky messaging is all well and good, but it doesn’t appeal to more conservative consumers.

If Three wants to compete with the big boys of the UK telco industry it has to present itself as a brand which is robust, dependable, reliable, competitive, consistent, mature and creative. It might be ticking a few of these boxes at the moment, but not all of them. And until it ticks more, it will remain a brand with a niche appeal.

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In the UK, we like quirky, we like imagination and we like the underdog, but only to a certain degree. We also like brands we can trust and rely upon, especially when we are going to be paying for a service which is increasingly dominating more aspects of our lives. We’re conservative, especially when dealing with money.

At the moment, Three is like that mate you like going to the pub with. He’s fun, adventurous and there will never be a dull moment as you set the world to right. However, the other telcos are dependable friends which you can go to with real-world problems. When it comes to spending money, most UK consumers will want to side with the dependable friend.

This is evident in the market share statistics over the last couple of years, which have remained largely static. Using Ovum’s WCIS, O2 leads the UK for mobile subscriptions with 36%, EE sits in second with 33% and Vodafone holds 20%. Three is in a distant fourth with 11% market share of mobile subscriptions in the UK.

Three has created an interesting brand identity, and it has worked in attracting some customers, but this is a niche. If Three wants to steal subscriptions from its competitors, it has to be more than a plucky outsider, it has to grow up and evolve its offering.

This is not to say Three does not have an excellent opportunity.

As mentioned above, 5G is going to encourage consumers to use more data than ever before. This will be the case over the coming months, and these trends will gather momentum as designed-for-5G services and applications emerge. Three is in a good position here, both in terms of the brand heritage and the spectrum assets it controls.

What is also worth noting is the focus is not only on 5G. Three is refarming huge swathes of 3G spectrum into 4G and a £2 billion investment in the network will also help 4G speeds improve across the country. However, with this article focusing on 5G, you can see from the image below the telco is certainly creating a more stable foundation to grow in the future.

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The constant issues with broadband has created an environment which is ripe for disruption. Just look at the progress alt-nets are making in the fixed world. With its UK Broadband acquisition, Three can offer FWA solutions to broaden the portfolio of services it can offer customers.

Looking at the FWA offering, there is a great opportunity for Three to enter the world of convergence. If priced correctly and the right data allowances offered, bundled FWA and mobile contracts could challenge BT in its pursuit of providing a seamless connectivity experience everywhere and anywhere.

Perhaps the most interesting aspect of this product is the plug-and-play nature. In theory, customers should be able to open the box, plug in the router and away it goes. No more waiting for engineers, it’s the simplicity which will sell it. A beta test is underway in Camden to ensure the reality of plug-and-play lives up to the promise, but this is a very interesting approach.

And finally, onto pricing. Being last to market offers Three a chance to see what rivals are going to charge. Yes, the rivals might be able to attract early adopters, but undercutting competitors on price could work very well, especially as 5G enters the mainstream. Both EE and Vodafone have unveiled very expensive tariffs, so it will be interesting to see how Three approaches this dilemma.

The new text-to-switch initiative from Ofcom will also help here. No-longer will customers have to endure the painful process of hopping around a call centre to cancel a contract, it is now (theoretically) a simple SMS.

Three does have a genuine opportunity to make substantial headway in the 5G era, but it needs to evolve its image and offering. Albert Einstein once said ‘the definition of insanity is doing the same thing over and over again but expecting different results’; if Three’s approach to 5G is the same as 4G, it might make gains, but it would not be a surprise to see the competitive landscape in the UK remain the same.

We would not like Three to ditch the image which has created, it clearly works with some demographics, but it needs to have more than one string to the bow if it is going to improve on an 11% market share.