Vodafone under pressure to cut its 4G SIM-only prices

Vodafone under pressure to cut its 4G SIM-only prices

Network operator Vodafone is facing pressure to cut its 4G prices with some analysts believing it will be forced to do when telecoms giant BT re-enters the consumer mobile market later this year. Vodafone starts its SIM-only 4G plans at £22 per month, compared to Three's offering of £7, EE's £9.99 and O2 at £11.

Although Vodafone's tariff includes more data (1GB) than the entry plans of its rivals EE and O2, it does not offer additional content such as Sky Sports, Spotify and Netflix; these are available on SIM-only 4G plans from Vodafone at £27 per month.

Kester Mann, senior analyst with CCS Insight, believes that now is the time for Vodafone's 4G offers to become more competitively priced. 'My view is that Vodafone needs to be more competitive in its 4G pricing and that its low uptake reflects high tariffs and inferior coverage compared to EE,' he told Mobile.

'The UK is such a cut-throat market that it will continue to lose share if it doesn't respond to the actions of its competitors, which have reduced tariffs.' With BT expected to enter the consumer market later this year, likely with a competitive offer, Vodafone 'cannot afford to wait', said Mann.

'I see Vodafone on around 10% of the 4G market right now, based on subscribers.' This compares to 29% for 2G/3G only, so the company's 'way under-indexing', he said.

'Of course, their 4G ARPU is probably higher than their rivals - and was 18% higher than their 3G ARPU, according to their end-March 2014 results - so this is also a factor to consider,' he concluded.

When contacted by Mobile regarding its 4G pricing, a spokesperson for Vodafone said: 'We believe we offer good value 4G price plans, especially when you add in our content offer.'


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