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UK's first 4G mobile service launched in 11 cities by EE

The UK's first fourth generation (4G) mobile service has gone live in 11

cities.

London, Manchester, Bristol, Birmingham, Cardiff, Edinburgh, Leeds, Liverpool,

Sheffield, Glasgow and Southampton will have access to network EE's 4G from

Tuesday morning.

Other mobile networks will not be able to offer 4G until next year.

Critics have questioned the service's affordability - particularly with regard

to data usage allowance.

Belfast, Derby, Glasgow, Hull, Newcastle and Nottingham will be active by

Christmas, the company said.

Network EE, formerly known as Everything, Everywhere and which owns Orange and

T-Mobile in the UK, has promised speeds of between 8 to 12Mbps - up to five

times faster than third generation mobile technology, known as 3G.

The extra speed and capacity allows for high-quality streaming of audio, video

and other content while on the move.

The company said as well as giving customers faster internet, 4G would also be

of big benefit to businesses.

All-you-can-eat world

However, such benefits come at a cost - the entry tariff of 36 per month

includes 500MB of data, beyond which an add-on cost must be paid if the user

wishes to carry on using the internet on their mobile.

Start Quote

EE was always going to have a difficult role to play being the first mover

Matthew Howett Ovum

An hour of streaming a programme using, for example, the BBC iPlayer mobile

app, can use up to 225MB - almost half the entry level tariff's data allowance

limit.

The add-on costs for extra data begins at 3 for 50MB, and extends to 20 for

4GB.

The company's top tariff for standard customers will cost 56 per month, and

has a data allowance of 8GB.

EE boss Olaf Swantee has said that the pricing is based on "months of consumer

research" and that the tariffs have been priced at "the sweet spot".

But Matthew Howett, a regulation analyst at Ovum, said EE has a challenge in

convincing consumers their 4G is good value for money.

"It's fair to say that EE has attracted a fair degree of criticism not so much

for the price of the 4G tariffs, but rather on the amount of data bundled at

each level," he said.

"EE was always going to have a difficult role to play being the first mover.

"However, its peers may be grateful for attempting to move away from an

all-you-can-eat world for data to an attempt to monetise it.

EE chief executive Olaf Swantee EE boss Olaf Swantee says his company has hit

the "sweet spot" with their pricing

"Too quickly data became commoditised for operators once smartphones and other

connected devices proliferated."

User poaching

A successful 4G launch is seen as critical for EE if it is to poach customers

from other networks.

EE was granted its headstart in the 4G market last month when it was given

permission to run the next-generation service using its existing bandwidth.

Its competitors are unable to offer 4G until the conclusion of a spectrum

auction scheduled for early next year.

The auction will determine how newly available signal spectrum will be offered

to the other networks.

The process had been continually delayed by a combination of factors, from a

change of government to threats of legal action from operators.

On 2 October, O2 and Vodafone agreed not to take legal action against EE, and

instead settled for assurances that the process of launching their own 4G

services would be sped up.

But since EE's 4G announcement, rival networks have sought to undermine the

firm's offering.

In a statement on its website, Vodafone underlined what it saw as a weakness in

EE's 4G - indoor coverage.

"Indoor coverage matters," the company wrote.

"That's why we've made a commitment to provide 98% indoor coverage.

"The reason we can do this is because we intend to use 800MHz frequency.

Without getting too technical, this means your signal travels further into your

home than any 4G signal that's available now, all things being equal."