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O2 Brings 4G Rivalry to the UK

The U.K. 4G services market is about to get more interesting. Telefónica UK Ltd., better known for its O2 brand, is to launch its 4G service on Aug. 29.

The launch will provide (at last) some competition to the U.K.'s largest mobile operator Everything Everywhere Ltd. (EE), which has held the 4G services monopoly in the U.K. since Oct. 2012, when it began using its existing 1800MHz spectrum allocation for LTE services. By the end of June this year, EE had 687,000 4G customers and is on target to reach 1 million by the end of 2013. (See Euronews: EE Sees 4G Take-up Double in Q2 and Euronews: 4G Arrives in UK.)

O2 UK will initially offer its service in three cities -- London, Leeds and Bradford -- and plans to add 10 more cities before the end of the year.

The U.K.'s other main mobile operators with 4G licenses, Vodafone UK and Hutchison 3G UK Ltd. (3), are also set to launch before the end of 2013. (BT Group plc also has a 4G license for the 2.6GHz band but is set to focus on business users -- see UK 4G Auction Falls Short.)

But even though it has ground to make up on its LTE rival -- EE says it will have its service available in 100 towns and cities across the U.K. by the end of August -- O2 isn't starting a price war. While EE has a 4G package (voice and data) on offer at £21 per month, O2's lowest tariff will be £26 per month (though details of exactly what will be included in that are not yet available).

O2 also can't compete on mobile broadband speed. While it might be able to match its rival in certain cities (with average real-world downlink speeds of 6-10 Mbit/s), EE has already doubled its 4G speeds in 15 cities by increasing the allocation of bandwidth for its LTE service to 2x20MHz from 2x10MHz.

So how can O2 UK trump EE? Well, it's going to try the services pitch, noting in its pre-launch announcement that it "plans to go beyond what has already been offered in the 4G market and bring to life the digital experience for its customers, starting with 12 months free music content for those who buy a 4G consumer tariff direct from O2."

It's also focusing attention on its 9,000 Wi-Fi hotspots, which are free to O2 customers, who can make calls and send and receive texts over the access points using its Tu Go application. (See O2 Brings a Wi-Fi Ruckus to the Wharf and MW13: Tu Go Users Get Chatty.)

And while O2 also targeting business users, EE has been doing that from the get-go and has signed up 2,400 business accounts for its 4G service.

Where O2 (and others) could make gains in the medium- and long-term is in customer experience management, an area where EE has not excelled. (See How Not to Do 4G, EE-Style.)

O2 says its customers will be offered "free 4G advice and guidance from an O2 Guru from launch, either in-store or via Web chat, to explore the possibilities that 4G will unlock," but that's hardly scratching the surface.

More interesting is the "30 day Happiness Guarantee" -- customers who sign up directly with O2 for its 4G service can be transferred to a 3G tariff if they are not happy with the 4G service.

Providing quality customer care and delivering a more personalized, positive experience is much easier said than done, though, and communications service providers in general are not known for keeping their customers consistently happy. This would be a good time for O2 UK to invest in that particular part of its business.

— Ray Le Maistre, Editor-in-Chief, Light Reading

Ray Le Maistre 8/2/2013 | 6:21:46 AM
re: O2 Brings 4G Rivalry to the UK It will be at least a year before the various 4G options really come to blows, as it will be late 2014 before the early adopters who jumped at EE's 4G service will come to the end of their 2-year contracts. The EE service appears to work quite well, from what I have heard. I think the 30-day trial is testament to O2's confidence -- the pressure will be on to not have a big % of those that try it immediately downgrade to 3G...
Sarah Thomas 8/1/2013 | 5:37:58 PM
re: O2 Brings 4G Rivalry to the UK It'll be hard for O2 to catch up, that's for sure. Customer service might be one area, but that's more of a third or fourth priority for customers. If the pricing is right and the service works well, they won't ever have to deal with customer service. The 30-day trial should incentivize a lot of current customers to give upgrading a try at least.
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