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Vodafone and EE 5G tariffs point towards a new form of digital divide

bankrupt money dollars

If the technology industry wants 5G to change the world, placing prohibitive pricing on data tariffs is a strange way to go about it.

The count-down clock to 5G is heading towards the small numbers, and now Vodafone customers will be able to pre-order 5G-ready devices and decide on what tariffs they are able to afford. Unfortunately for some, the prices might prove to be too much of a premium for wallets to stomach.

Devices and various different tariffs are now available for pre-order through the Vodafone website.

Tariff Samsung Galaxy S10 5G Xiaomi Mi MIX 3 5G
5 GB Red Extra £149 upfront, £58 monthly £99 upfront, £50 monthly
15 GB Red Extra £99 upfront, £62 monthly £99 upfront, £54 monthly
30 GB Red Extra £49 upfront, £66 monthly £49 upfront, £58 monthly
60 GB Red Extra £49 upfront, £70 monthly £49 upfront, £62 monthly
25 GB Red Entertainment £99 upfront, £69 monthly £49 upfront, £61 monthly
50 GB Red Entertainment £49 upfront, £73 monthly £49 upfront, £65 monthly
100 GB Red Entertainment £49 upfront, £77 monthly £49 upfront, £69 monthly

All contracts set at 24 months

What is missing from the above table is a nod to Huawei. Vodafone has hit the pause button on devices from the under-fire Chinese brand. As with EE, Huawei’s 5G phone will not be sold through the Vodafone website for pre-order. It would appear this will be the case until the difficulties with the operating system and ecosystem are ironed out.

Despite these complications, the prices are what the prices are.

“Given its high-profile battle with EE to lead in 5G, I expected Vodafone’s initial tariffs to be punchier,” said Kester Mann of CCS Insight. “The entry £50 offer includes just 5 GB of data; on a 5G network, customers could quickly burn through that.”

Mann is absolutely correct; 5 GB will not last long given the promise of the 5G ecosystem and the usecases envisioned. However, upgrading to bulkier tariffs is perhaps cost prohibitive, potentially creating a new digital divide.

As it stands, the price is prohibitive for some. £52 as a starting point is a high barrier to entry. It seems only the privileged will be comfortable with spending so much on a connectivity contract, creating a society of ‘haves’ and ‘have nots’ and another potential digital divide.

Although there have been promises 5G tariffs will be priced on similar levels to 4G, the premium should come as little surprise. People will be prepared to pay for bragging rights.

It should also be noted EE has priced the connectivity options at the same levels. Vodafone have slightly undercut EE for 5G tariffs, but not by much. This is perhaps a situation which we should have expected. Until all four MNOs are on the market with a 5G proposition, threatening to steal valuable postpaid subscriptions, the price will remain lofty.

Tariff OnePlus 7 Pro 5G Samsung Galaxy S10 5G Oppo Reno 5G
30 GB, one swappable £64 a month, £50 upfront £74 a month, £10 upfront £59 a month, £50 upfront
30 GB, two swappables £69 a month, £50 upfront £79 a month, £10 upfront £69 a month, £50 upfront
60 GB, two swappables £74 a month, £30 upfront £84 a month, £10 upfront £69 a month, £30 upfront
60 GB, one swappable £69 a month, £30 upfront £79 a month, £10 upfront £69 a month, £30 upfront
120 GB, three swappables £79 a month, £10 upfront £89 a month, £10 upfront £74 a month, £10 upfront
100 GB, two swappables £74 a month, £10 upfront £84 a month, £10 upfront £69 a month, £10 upfront
10 GB, two swappables £59 a month, £170 upfront £69 a month, £130 upfront £54 a month, £170 upfront
10 GB, one swappable £59 a month, £70 upfront £69 a month, £30 upfront £54 a month, £70 upfront
10 GB, two swappables £64 a month, £70 upfront £74 a month, £30 upfront £59 a month, £70 upfront

All contract set at 24 months

As you can see, the prices are not consistent with the overall rhetoric of the industry. For many years, the industry has preached of democratizing connectivity, while 5G was supposed to be a technology which benefitted the masses.

At the moment, the risk of a digital divide is very apparent. The rich will get the benefits while the poor remain in the 4G-era. While the genuine 5G usecases are yet to emerge, this is not necessarily an issue. 5G offers little more than increased speeds right now, a premium which isn’t really needed with the applications and services which are currently on the market.

Over the next 6-12 months, Three and O2 will enter the fray with their own networks. This should cause the price of 5G connectivity to tumble. Hopefully at least, as the current state-of-play is a connectivity world which has been designed for the privileged.

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One comment

  1. Simon Hodges 24/05/2019 @ 11:27 am

    In addition to democratic questions there are also questions as to what extent MNOs are misleading both customers and the government about 5G technology.

    In terms of being a 5th generation technology the big difference between 4G LTE and 5G is the use of small cells and the millimetre wave spectrum from 26Ghz to 300Ghz. There is not even a set date for the auction of any of this spectrum yet and there will probably need to be public consultation about the health and environmental risks of deploying it on such a ‘ubiquitous’ scale which firms like Huawei that it even anticipates its installation in sewer pipes apparently. Unfortunately you can’t buy equipment to even measure these frequencies without spending £10,000s

    In the UK the ‘5G’ that EE and vodaphone and rolling out is probably best thought of as being part of 4G gigabit LTE as most of the spectrum auctioned was in the 3.4Ghz range which sits between the the 2 common bandwidths used by wireless home networks of 2.4 and 5Ghz which is all in the sub 6Ghz spectrum. That spectrum could have been freed up for 4G long term evolution and there is nothing next generation about it.

    There has been a great deal of obfuscation and dishonesty in the roll out of what has been dubbed fake 5G. All the massive speeds and ultra-low latency are to be found in the millimetre wave spectrum and this is not coming to Europe any time soon. Verizon in the US have rolled out mmWave tech at 28Ghz in Chicago but test downloads show 1 – 1.4Gbps connections which are something of a disappointment as they only match what has already been achieved with gigabit LTE testing and nothing like the 7Gbps downlink and 3Gbps uplink that Qualcomm are claiming as being achievable with their X55 modem.

    In 2016 Qualcomm launched their X5 LTE modem which was capable of 150mbps downlink and 50Mbps uplink. In just 3 years by vastly increasing usage of carrier aggregation and MIMO the latest Snapdragon has improved performance over 10 times and the 4G X24 LTE modem claims up to 2Gbps downlink and 316Mbps uplink. Much the same thing is happening with WiFi 6 shipping with home routers this year which should also see connections of 1.5 to 2Gbps. Of course all of this requires the infrastructure out in the real world but that is in constant upgrade.

    With these vastly expanded capabilities already on offer from 4G gigabit LTE and WiFi 6, then one suspects that the public and the government are being miss-sold 5G on a rather large scale especially given that no low latency mmWave tech is on offer anywhere in Europe and there is no guarantee it ever will be. 4G LTE offers all the speed that we need and coverage can be improved easily. There is no need to spend $trillions on 5G globally in what is being launched as some kind of highly suspicious tech emergency with claims that we cannot economically afford to get left behind.

    Last but not least as you point out 5G data rates don’t really make sense when its costing £54 a month for a sim only plan with a 100GB data usage. On a 10 gigabit connection you could theoretically use up the whole allowance for 1 month in just 80 seconds of download frenzy.

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