The birth of 4G was seen as another significant step for the telecom industry, but it seems the collective euphoria expected at time of launch was slightly off the mark in terms of consumer perception.
A survey carried out by YouGov revealed that a significant number of customers was concerned about the price of 4G, and additionally confused about the benefits they will encounter as a result of upgrading to the next generation of mobile.
More than half of those questioned (55%) admitted they regard 4G as too expensive, while 66% are uneasy about spending more money updating their existing handset to accommodate increased internet speeds. EE’s tariffs have been criticised in the past for being on the premium side, with its highest plan costing £51 per month. Vodafone and O2 are planning roll-outs later this summer, and while no price plans have been announced yet, it appears likely they will opt for a premium price for a premium service. Upstart Three has differed from rivals by promising not to charge any extra for 4G.
YouGov’s research confirmed that these price fears have foundation, though, as it found 4G users pay a monthly average of just under £15 more than other smartphone owners. In times of austerity it seems consumers want to be 100% confident they are getting more bang for their buck.
John Gilbert, lead director at YouGov technology and telecoms, suggests that people may be uncomfortable about paying a higher price when they are unsure of the advantages: ‘What is the margin of value? Is it really worth an extra £15 per month?’ he says. ‘We all know about 4G in terms of the speed and technicality, but nobody really knows how it will benefit their life.’He adds: ‘You’ve also got to throw 4G enabled phones into the equation, which adds another cost. People will think twice about spending more money if they’re not sure of the advantages.’
Is EE bringing home the Bacon?
Is this lack of consumer awareness ultimately the responsibility of EE? The umbrella company of T-Mobile and Orange had a considerable head-start on its competitors, but although its website does provide a range of information on 4G’s speed, browsing and video capabilities, there is less of a focus on other benefits.
‘EE has piled lots of money into the Kevin Bacon advertisements, which were well received by and large,’ Gilbert adds. ‘Soon all operators will be offering 4G, but at the moment the benefits are not being articulated to the public at large.’The YouGov poll reflects this, as although 80% of those questioned knew about the existence of 4G, only one fifth knew what it offered in more detail. A perhaps more alarming statistic revealed that one in three didn’t have a clue what 4G means or what it provides.
EE defended its position by telling Mobile that it is ‘entirely confident’ about its approach thus far. A spokesperson says: ‘Superfast 4GEE is proving very popular with over half a million of our customers already signed up. In fact, we’re ahead of our target to reach one million 4G customers by the end of the year. We remain firmly committed to helping customers access 4G in a variety of ways and in a way that suits them best.’
However, O2 CEO Ronan Dunne aimed typically subtle criticism at EE’s strategy earlier this year, when he said: ‘What we want to focus on is why customers will want 4G –and that’s because of the products and services, rather than the merits of 800Mhz. We will be making the case for 4G in a very customer-centric way, rather than just saying “my technology is faster than your technology”.’
An O2 spokesman spoke of its ‘intention to go beyond what has already been on offer in the market and give our customers a new and exclusive range of digital experiences…and while it’s too early to talk about pricing, it is not expected to be prohibitive’.
This suggests that new propositions are on the horizon once the four major networks reach an equal playing field. The operators have a lot riding on the success of 4G and how it is delivered to customers - Vodafone needs the UK market to come through after its problems in southern Europe, while O2 will want to sustain recent growth after a poor preceding period, so clarity of customer benefits will be crucial.
All eyes on late summer, then, in the hope that price and service can be brought to a level that genuinely ignites consumer enthusiasm for the next generation of mobile internet.