Vodafone and 3UK set out 5G pricing strategy

Vodafone and 3UK have both announced their 5G packages, with the common factor being a broadband offering.
Vodafone Together starts at £31 a month for an 18 month SIM-only (SIMO) plan plus home broadband and a less-than-generous 1Gb of data. However, for £46 you can have unlimited 5G mobile plus home broadband. It’s important to read the fine print on this deal though, because it includes ‘super-fast broadband’ not 5G broadband.
You will get a single sign-up process and a single bill, and the company will give you a 15% discount on any additional mobile phones added to the account.
Subscribers are also likely to be put off by the prices for the less than stunning choice of four 5G handsets, coupled with the fact that they mainly only work in 4G mode except in parts of Bristol, Cardiff, Glasgow, Manchester, Liverpool, London, Birkenhead, Bolton, Gatwick, Lancaster, Newbury, Plymouth, Stoke-on-Trent and Wolverhampton where Vodafone has rolled out 5G. (By the end of 2019 this will have expanded to Blackpool, Bournemouth, Guildford, Portsmouth, Reading, Southampton and Warrington.)
3UK has taken a slightly different approach, as is its want. It currently has more 5G spectrum than anyone else, and has ambitious rollout plans. It launched its 5G network across central London on 19 August 2019, where it has a deal with SSE for fibre. SSE, in turn, has a deal with Thames Water to roll out fibre through its waste water network, enabling it to add fibre in hard-to-reach areas in the city centre without the requirement to dig. (see Three and SSE plan West End 5G).
Its broadband offering is 5G based (fixed wireless access or FWA) and will cost £35 per month for unlimited home broadband, with the company already stating it will charge no more for 5G mobile than for 4G. This means its early 5G revenue is going to come from shaking up the home broadband market and cannibalising revenue from BT, Virgin, Sky and Vodafone. While EE and Vodafone are focusing on the mobile side of 5G, 3UK is targeting FWA based on its UK Broadband assets (acquired 2017) and relationship with SSE. Only in the second phase will it rollout mobile services, initially to 25 cities by the end of 2019. The company has stated that its 5G network will be at least twice as fast at launch as rivals’ networks. Tests in Camden delivered 138Mbit/s speeds, although speeds will go up as the network settles in.
So what does this mean for business customers and the B2B carriers that serve them? Clearly, the unlimited data packages for fast broadband services are attractive for homeworkers and microbusinesses. When these are bundled with mobile services they become even more attractive. Both families and businesses are likely to want multiple handsets linked to the same account, meaning that 5G smarthome family plans that include broadband, mobile and additional services such as storage, security and Microsoft 365 packages are ideally suited to those running a small business or working from home.
Microbusinesses and homeworkers are the new frontier when it comes to increasing revenues for UK service providers, as so many are poorly served, buy IT and telecoms products from multiple providers, and are often ‘hidden’ on consumer packages (meaning they are hard to sell additional services to). Selling these customers more products through better targeting is a quick win to grow market share and revenues.
3UK is quite right in its assessment that FWA is the stop-gap revenue strategy that will tide companies over until demand increases for other bandwidth-hungry services. Aspirational services such as Virtual Reality will have their day, but not in 2020 when the real race will be to tie in small businesses, rural businesses and home broadband customers to create a loyal base on which to build. Christmas 2020 is when we should be looking for 5G handset sales, and thus the growth of the mainstream 5G mobile market, not Christmas 2019. This war will not be won on advertising, but on bundling and pricing, and on connecting customers in rural areas that currently languish on not-so-super broadband.

  • EE – launched 5G in May 2019.
  • Vodafone – launched 5G in July 2019.
  • 3UK – launched 5G in August 2019.
  • O2 – set to launch 5G in October 2019.