4G fails to lure customers to EE

EE’s expensive drive to lure customers onto its 4G network appears to be stumbling.

EE is currently the only network in the UK to offer 4G services, and has rammed home that message with an enormous television advertising campaign starring Kevin Bacon. Yet, that exclusivity and marketing blitz has failed to deliver a huge upswing in customers joining the network.

EE added 201,000 contract customers to its network in Q4 following the launch of its 4G service in November, which accounts for only 27% of the total number of new customers (752,000) that it added over the course of 2012.

However, the network claims that the number of existing customers choosing to renew their contract with the network grew by 20% in the second half of 2012, suggesting that even if 4G is failing to lure customers from other networks, it’s at least helping EE to retain customers.

The other piece of good news for EE is that it’s convincing customers to pay more for 4G contracts than they were previously. The company’s results presentation boasts that it’s making “good progress” in migrating customers from its daughter networks – Orange and T-Mobile – and that those customers are on average paying 10% more than they were previously. Overall revenue from data services was up 10% year-on-year.

EE has been forced to defend the price of its 4G tariffs, which start at £36 per month (with handset included) for only 500MB of data – a cap which could be broken in just over five minutes if downloading at the network’s maximum speed.

EE’s tenure as the country’s only 4G network will likely come to an end this summer, with rivals currently bidding for 4G spectrum. Those rivals are likely to put further pressure on EE’s tariffs, with 3 pledging that it won’t increase the price of tariffs for 4G services.