Vodafone and O2 4G ready to compete with market leader EE

Britain is getting ready to face hyper competition in the 4G LTE space. O2 and Vodafone will launch 4G services today to compete with market leader EE.

Arrival of LTE from both O2 and Vodafone, late entrants to the rapidly growing 4G world in the U.K., will benefit users as they can enjoy mobile broadband speeds more than five times faster than 3G.

EE, a British joint venture between Orange and Deutsche Telekom, started rolling out 4G in major cities from October 2012.

EE charged a premium of 10-20 percent on equivalent 3G tariffs, Reuters reported. It had signed up 687,000 4G customers by the end of June. EE targets to have more than 1 million subscribers by the end of the year.

EE LTE campaign

On Wednesday, EE said Accrington, north-west England, was the 100th town to be connected, and with the nine other towns switched on in August, it was now available in 105 towns and cities, covering some 60 percent of the population.

O2 is launching 4G in London and two other cities, while its rival Vodafone is starting off just in the capital. O2 will start LTE services in London, Birmingham and Manchester in December, with coverage available in 50 cities by the end of 2014 and reaching 98 percent of the population a year later.

Earlier, Analysys Mason predicted the UK would be the third largest 4G market in the Europe by the end of 2014 with nearly 8 million connections, after France and Germany.

LTE growth chart

But some of the telecom vendors shared their concerns about 4G launch and the mobile broadband experience.

4G Indoors

In light of the continued increase in mobile data usage indoors, as well as the Ofcom ruling that in-building 4G coverage must be available to 98 per cent of the UK population by 2017, operators must now ensure that 4G is available to the many subscribers who are accessing data services within buildings.

The UK may be behind other markets, such as the U.S., in terms of commercial LTE deployments, but that hasn’t prevented the operators from adopting new technologies to propagate mobile phone signals into a building. Both the 800MHz and 2600MHz bands, released by Ofcom, provide a well needed increase in spectrum to support new 4G services.

“DAS systems are now representing the fastest growing segment of the in-building wireless market. The development of LTE is playing a key role in this increased investment as well as the continued need for high-quality services in the 2G, 3G and other frequency bands. We’re already deploying multi-band, multi-technology DAS systems for UK mobile operators, incorporating LTE frequencies, and this trend looks set to continue,” said Ian Brown, CEO, Axell Wireless.

Operators lack innovation

Operators continue to invest heavily in LTE and this week sees the launch of commercial 4G services from Vodafone and O2. However, to stay one step ahead of the competition, operators need to match their investment in data with investment in innovation and core communication services. Today, operators buy standard networking products from a limited number of suppliers, with network innovation suffering as a consequence.

As brand merchandisers, operators now differentiate themselves by offering exclusive access to the latest Apple or Samsung device. The exclusive arrangement is often short lived as device manufacturers don’t want to restrict the availability of their latest products.

The same rule applies to operators offering exclusive content bundles – consumers will flock to a particular network to take advantage of the offer – but eventually the content provider will relinquish the exclusive rights, offering distribution deals to all of the networks.

Operators can differentiate by capitalizing on their individual network capabilities, introducing new applications and services that leverage real-time information about the subscriber.

This is a battleground where they can win, but instead they’re being beaten at their own game by device manufacturers and OTT players. The irony is that it’s the operators that are better placed to innovate, because unlike their OTT rivals they can develop applications that fully exploit both the device and the network.

The operators used to be truly pioneering, laying the foundations of the mobile telephony system. Today’s approach is much more conservative, relying on standard offerings with little or no product differentiation.

“LTE provides an opportunity for network operators to redefine their role as genuine leaders in the communications sector. Operators need to break away from dependency on vendors and rediscover the pioneering, entrepreneurial approach they once had,” said Mark Windle, head of Marketing, OpenCloud.

Maintaining the quality of 4G

According to Cisco, video services are set to increase and will account for 66 percent of all mobile traffic by 2014, becoming the cornerstone of the 4G experience. However, as data demand grows year-on-year, operators risk significant damage to their reputation if new 4G services cannot maintain the quality levels along with the improvement in speeds.

Operators also need to maintain their legacy 2G and 3G networks to run alongside 4G. No operator makes the transition to 4G overnight, for regulatory, business and technical reasons.

With multiple network topologies, subscribers still expect the same level of experience for mobile as they do for fixed. The needs and expectations of all users, whether on legacy standards or 4G, still need to be maintained.

“Armed with an understanding of the performance of their 4G networks using big data analytics, operators should be in a strong position to deliver new services and tariffs to enrich their offerings and optimise their competitiveness. Consumers should be more willing to pay for a guaranteed quality of service, whether it’s for HD video on demand, music streaming or online gaming,” said Lyn Cantor, president of Tektronix Communications.

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