U.K.-based joint venture Everything Everywhere, a combination of France Telecom’s Orange and Deutsche Telekom’s T-Mobile operations, turned on LTE services in a handful of markets this week for testing purposes on its way to launching commercial services later this year.
The carrier said initial services are available in parts of London, Bristol, Cardiff and Birmingham for testing purposes. The company added that it expects to launch commercial services across 16 markets covering approximately 20 million potential customers by the end of the year.
In support of the scheduled LTE launch, EE announced five devices, a mobile hot spot device and a wireless modem. The smartphones include Samsung’s Galaxy S3, Nokia’s Lumia 920 and 820, HTC’s One XL and Huawei’s Ascend P1 LTE. Huawei will also be providing the mobile hot spot device and wireless modem.
Everything Everywhere, which was announced back in 2010, recently gained approval from U.K. government regulator Ofcom to use its 1.8 GHz spectrum holdings to offer LTE services, a move that has rankled some of its rivals. That spectrum was originally set aside to support 2G and 3G services. EE has also been using its 800 MHz spectrum to trial LTE in select markets, but has yet to gain government approval for commercial services.
“Rival U.K. carriers already expressed their displeasure about Everything Everywhere’s (now EE’s) head start in the U.K. LTE market,” explained Rich Karpinski, principal analyst at Yankee Group. “With launch details now official, they aren’t likely to be any happier.”
Everything Everywhere rival O2 began LTE trials across portions of London late last year using 2.6 GHz spectrum under a “test and development” license from Ofcom. As part of gaining approval for the joint venture last month, EE did sell off 30 megahertz of its 1.8 GHz spectrum holdings to rival 3 UK.
Ofcom is planning to auction off LTE/WiMAX-specific spectrum licenses in the 800 MHz and 2.6 GHz band later this year, with actual bidding expected to begin in early 2013.
In addition to the network push, EE said its offering would be available alongside commercial services from its parent companies, which currently serve a combined 27 million people. EE noted that 700 former Orange and T-Mobile retail stores will now be branded with the EE name, though they will continue offering services branded by Orange and T-Mobile. EE customers will also roam onto 2G and 3G services currently provided by Orange and T-Mobile.
Analysts were a bit perplexed at the branding efforts that could prove confusing to customers.
“The long term objective of Everything Everywhere has always been to bring the EE brand to the U.K. market and therefore the timing is right in that it will be differentiated by being a 4G service,” noted Carrie Pawsey, senior analyst of telecoms strategy at Ovum. “However, from a strategic and cost position we cannot see this how sustaining three brands is a long term solution and the quicker the two legacy brands are withdrawn, the better for the business.”
In addition to its wireless broadband offering, EE said it will provide fiber-based broadband services to consumers. That offering is expected to be available to 11 million households and businesses by the end of the year and two-thirds of those potential customers by the end of 2014, with analysts noting the move could provide a strong bundled alternative in the market.
“We think EE will offer attractive bundles for customers wishing to take fixed and mobile broadband services together,” explained Pawsey. “No one in the [United Kingdom] has got quad play right, but interestingly one of the most successful operators at selling fixed and mobile services together is Orange France with its Open product that now has in excess of 1 million customers. While Virgin has a quad play offer and Talk Talk is rumored to be looking to increase its mobile customer base both of them have relatively insignificant mobile market shares. Similarly Vodafone and O2 also sell fixed broadband, but they aren’t aggressive enough to take on the fixed players for a significant fixed broadband market share. Yes, the U.K. telecoms market is highly crowded, but we think there is still an opportunity for a dominant total communications provider that gives users a fantastic experience whether it’s on fixed or mobile and that is where we think EE is going to position itself.”
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