Thomas Wehmeier, Principal Analyst at Informa Telecoms & Media comments:
EE invests in significant network coverage
Today, EE has announced a major new phase in the build out of its UK 4G network. By committing to cover a further 17 towns and cities in 2013 and taking its total to 35, the speed of coverage expansion is proceeding faster than outlined in EE’s original strategy and noticeably faster than we have seen in most other 4G markets worldwide. By the end of 2014, EE hopes to achieve near nationwide population coverage and extend its 4G reach to 98% of the UK population.
But today’s announcement is not just about covering more places across the UK, EE is also investing in improving the capacity of its network in existing cities. This so-called densification of the network is a vital step to prepare for its next phase of customer growth.
The early experience on EE’s network has been almost widely praised by early adopters – a fact supported by positive independent test results – but the real challenge for EE will come when its network starts to fill. To ensure a consistent experience as more customers join the network, EE has to take this step to invest in additional capacity. Importantly, this move will also help to improve coverage indoors so that customers can enjoy 4G services not just outside on the move, but when they’re inside the home or office.
EE prepares for 4G competition
A competitive 4G market is expected from as early as May. EE is investing ahead of that time to ensure that it can consolidate the lead it has established thanks to the head start awarded to it by the UK regulatory authorities. By its own admission, EE’s management are “happy” with the way things have gone so far, but the real challenges to its 4G strategy are yet to come.
The next six months will be a test of willpower for EE’s senior management as much as anything. EE will inevitably face a marketing onslaught in the coming months as its competitors prepare for and kick-off their own 4G launches. Is EE prepared to invest to keep its network experience ahead if rivals? Can it secure enough compelling devices to avoid customers being lured by must-have phones offered by competitors? And, most importantly, can it resist the temptation to dilute prices in the face of the inevitable competition?
The responses to those questions go straight to the top of EE’s business and the right man certainly looks to be at the helm. Olaf Swantee has consistently proven he has nerves of steel. He has stared down armies of lawyers and politicians to secure an early 4G launch for his company, he has turned round a drifting joint venture and, most impressively, he has launched an entirely new brand built on 4G in the face of much scepticism.