Vodafone 5G network opens new front in Britain’s wireless wars

By: |
Updated: July 4, 2019 9:10:44 AM

Vodafone Group Plc switched on the U.K.’s second 5G wireless network on Wednesday, kicking off a commercial battle with dominant rival EE that could shape a decade of sales.

5G gives Vodafone a chance to reset its brand after a period of intense customer complaints and cancellations that peaked in 2015, said Ben Wood, an analyst at CCS Insight.

Vodafone Group Plc switched on the U.K.’s second 5G wireless network on Wednesday, kicking off a commercial battle with dominant rival EE that could shape a decade of sales.

The technology’s faster download speeds and more reliable connections give the first movers an opportunity to snatch a bigger share of a saturated market. Back in 2012, EE — now owned by BT Group Plc — launched 4G services almost a year ahead of the pack, an edge that cemented its position as the U.K.’s largest mobile carrier.

Vodafone isn’t making the same mistake again. Its 5G service went live in seven cities just a month after EE’s launch, giving both companies a chance to grab business with early adopters. Britain’s other two mobile networks — CK Hutchison Holdings Ltd.’s Three U.K. and Telefonica SA’s O2 — aim to offer 5G by the end of the year.

Britain’s mobile price war looks set to continue in the 5G era: Vodafone said Wednesday it would set prices according to connection speed rather than the amount of data consumed, and won’t charge a premium for 5G.

“We’ve decided it’s time for the U.K. to be unlimited,” said Vodafone’s consumer director Max Taylor.

The stakes are arguably higher now than when 4G was launched. Europe’s phone industry has been stagnating for several years, partly because handsets have become more expensive and offer fewer appealing features with each upgrade. That’s dampened an important source of revenue for the network operators. 5G marks a rare boost in power and speed.

“5G is a massive opportunity for the smartphone sales business of operators like Vodafone,” said Canalys analyst Ben Stanton by email. “For the first time in a decade, customers will be compelled to upgrade both their device and their tariff at the same time.”

EE has plastered 5G ads across big cities and enlisted rap star Stormzy in its biggest ever marketing effort, a spokesman said. It offered 5G connections at the five-day Glastonbury music festival, where Instagram-happy smartphone users gobbled up 104 terabytes of data, 1,000 times more than at the same event in 2010, according to EE.

5G gives Vodafone a chance to reset its brand after a period of intense customer complaints and cancellations that peaked in 2015, said Ben Wood, an analyst at CCS Insight. Vodafone poached Taylor in March from EE, where he was head of marketing.

“If you can associate your network brand with being the best for 5G then that’s going to be a big leg-up on your rivals,” said Wood.

Huawei Risks

EE and Vodafone aim to reach more than 15 urban centers by year end. The networks can handle far more data than 4G and could end up being 100 times faster, pushing down operating costs.

Yet the commercial opportunity is still clouded in uncertainty.

All the U.K. carriers are rolling out hundreds of 5G radio antennas supplied by Huawei Technologies Co., before the government has decided whether to restrict the Chinese vendor over concerns that its 5G systems are vulnerable to espionage or disruption. If it does, the companies could have to replace Huawei gear with equipment from alternative suppliers.

The U.K. is the biggest European market so far to offer competing 5G services. Two Swiss networks, Sunrise Communications Group AG and Swisscom AG, began theirs earlier this year.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1AI Solutions: Making real estate firms smart
2Why SMBs need to embrace modern technology
3Honor 20i: Design, display and camera are top-notch