O2UK announces 4G pricing

The UK arm of Spanish group Telefonica, O2, has announced pricing details for its LTE services, which are due to be launched later this month.

The operator’s prices undercut those of rival EE, which launched LTE services late October 2012. However, the data usage limits quoted in the price plans are lower than its rival.

All of O2’s 4G price plans include unlimited free voice calls and SMS messages. For customers buying a handset with their 24-month price plan, prices begin at £22 per month for 1GB data. It will cost £27 per month for 5GB, but that allowance  will be dropped to 3GB for users who sign up after the introductory period which ends October 31, 2013.  £32 will buy an 8GB cap, which will  drop to 5GB after October.

If customers need additional data, they will be contacted about bolt-ons, which will be available at £6 for 500MB and £10 for 1GB.

In comparison, EE charges £31 per month for a 24-month contract with a phone with a 1GB data limit. £41 per month will buy EE customers 2GB data while £46 will buy 10GB. EE offers up to 20GB data packages, which currently costs £51 per month.

Vodafone’s entry-level 4G SIM-only tariff is prices at the same as O2’s, at £26 per month but only includes 2GB of data rather than 1GB. Vodafone’s most expensive option, which includes 8GB of data, 3GB wifi allowance and sport or music content, is priced at $57 per month.

SIM-only deals begin at £26 per month for 1GB; and £31 and £36 per month respectively for 5GB and 8GB packages, which will also be lowered after the introductory period to 3GB and 5GB.

O2 4G Pay&Go and mobile broadband tariffs will launch before the end of the year, and O2 said that more details released about these deals soon.

O2’s 4G SIM only packages for small businesses are cheaper than its consumer offering; starting at £21.67 for 1GB of data on a 12 month contract. The same introductory offer applies to its higher volume small business plans; 5GB for £25.84 a month exc VAT until end of October (3GB as standard) and 8GB for £30 a month exc VAT (5GB as standard).

Mobile broadband, tablets and data-only tariffs will be available from £14.17 a month, while O2’s mobile wifi offering Pop Up Office starts at the same price, and will be available from mid-September.

Kester Mann, network operator specialist at research firm CCS Insight said that although EE, Vodafone and O2 are all charging a premium for LTE services, he believes that the UK will become one of the most competitive markets for 4G in Europe.

“All of the four major MNOs have 800MHz spectrum, I think that makes the UK pretty unique in Europe, and that’s important. 3UK will launch 4G services soon as well, and as it is a highly disruptive operator and that will make the market more competitive to say the least.”

He added that in the long term, he is expecting the pricing of UK 4G services to come down to levels closer to 3G pricing.

“The premium O2 and Vodafone have set reflects their keenness to recoup network investment but also gives them flexibility to reduce prices in the long term.”

The inaugural LTE Voice Summit, part of the highly successful LTE World Series of events, takes place on 23-24 October 2013 in London.