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Three set to cause more disruption with 5G pricing plans

EE is finding out first is not always best as Three is set to join Vodafone is offering more attractive 5G data tariffs.

When EE first launched its 5G tariffs earlier this year, it was as everyone would have expected; the MNO charged a premium, and a lofty one at that, the 5G connectivity. Vodafone undermined this position with an innovative approach, tiering on speeds not data allocations, and now Three will go one step further offering access to 5G connectivity at no extra cost to a customer’s 4G connectivity plan.

All new and existing customers will have access to 5G with no speed caps and at no extra cost on all contract, SIM only and PAYG mobile plans. There will be data caps if you have currently have a cap on your 4G plan, however SIM-only unlimited data plans start at £20 per month.

“The forthcoming months are going to be game-changing and with our unrestricted plans, we are looking forward to unleashing the full potential of 5G to all,” said Three CEO Dave Dyson.

The approach is a sensible one from Three and leans on the strategy put forward by T-Mobile in the US. 5G is currently seen as somewhat of a bonus for customers right now, due to the limited geographical coverage of the airwaves. Offering 5G connectivity for free will certainly attract some customers, who will just have to worry about getting a 5G compatible device.

“Three’s hand was likely forced to some extent by Vodafone’s initial disruptive and unexpected pricing strategy for 5G,” said Kester Mann of CCS Insight. “But its enviable spectrum holding places it in a commanding position to undercut any rival.

“More than for any other UK operator, 5G is crucial to Three. It represents an opportunity to reinvigorate the brand, overcome a negative network perception, achieve the scale it as long-for craved and push into other segments such as convergence and enterprise.”

This is where Three will have to be careful. With more of society migrating to digital, consumers will come to expect a more resilient and consistent experience from connectivity providers. This is where Three has fallen down in recent years.

In the latest Opensignal report, Three was battling it own for last place with O2 in the majority of the categories. It had the lowest availability scores, poorest for video experience, second-slowest on speeds and worst for latency. This will not be good enough in the 5G era and if this trend continues, it would not be surprising to see Three lose market share.

Three might have been able to disrupt the market on price during the 4G era, but that will not be enough to mount a serious challenge to market share in the 5G era. Consumer expectations will shift across to availability and experience soon enough. Three has an opportunity to make a genuine impact on the status quo, but it needs to kill off the perception (which has often translated to reality) that it has the worst network in the UK.

The stars do seem to be aligning for Three. Pricing looks to be right, it has the best spectrum out of the four MNOs, the UK Broadband acquisition has set it on the convergence path and its traditional customers are perfect for the 5G era. If it can create a network which competes with the best in the UK, the next couple of years might be a very interesting quest for Dyson and his cronies.

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