EE unveils new LTE tariffs and first 4G MVNO

Not only has the UK's largest cellco, EE, stolen a march on rivals by launching LTE ahead of new spectrum auctions, but it has even announced its first MVNO, cellphone retailer Phones4U.

This could further anger Vodafone, Telefonica O2 and 3UK, all of which have to wait for the auctions, due to start next week, before they can start to build out LTE networks. EE, a joint venture between Deutsche Telekom and France Telecom, was able to move early by refarming its 1.8GHz GSM spectrum, but is the only UK operator to have holdings in this band, which is increasingly mainstream for 4G.

However, Phones4U will not offer LTE services until later in the year - initially its MVNO agreement will be confined to 2G/3G and those offerings will go live in March under the brand LIFE Mobile. There are about 90 virtual mobile operators in the UK, and EE is the market leader in powering them. Phones4U will market its own offering via its 600 high street stores.

Also from EE, the carrier is already modifying its controversial tariff structures for its new LTE network, which will be live in 35 towns and cities by March. The other cellcos, assuming they all win licences in the auction for 2.6GHz and 800MHz spectrum, are expected to go live from April onwards in selected markets, so the early mover is likely to be tweaking its offer in readiness.

At launch, EE's pricing was criticized for taking advantage of its temporary monopoly by charging premium rates. Its new range of plans offers lower rates for moderate users, but charges far higher fees for data hogs. It has not offered customer numbers for LTE so far, but is clearly trying to lure as many new subscribers as possible before its rivals enter the space.

The days for snapping up those desperate for 4G speeds at a premium price are over, and EE is looking to lure mass market users, and to lock them in so they cannot leap quickly to new challengers. In an offer that expires at the end of March - before other cellcos go live - there are several entry level options including 500Mbytes of data, with unlimited calls and texts, for £31 a month on a two-year contract. Upfront charges for devices can be as low as £30 and this represents a saving of £90 across the lifetime of the contract compared to the current cheapest LTE tariff at EE.

The cellco also said that it will launch a 20Gbytes plan for 'super-users' (currently less than 1% of its 4G base), which will come in two variants - SIM-only for £46 per month on a 12-month contract, or £61 per month for 24 months with a subsidized handset. These prices will increase to £61 and £76 respectively for new customers who sign up after the end of February.

"It's fair to say that EE has attracted a fair degree of criticism not so much for the price of its 4G tariffs, but rather on the amount of data bundled at each level," said Matt Howett, a telecoms analyst at Ovum, in a research note. "In the end it has gone for the middle ground and priced services at a premium, but not at levels completely inaccessible to the mass market."