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EE Doubles LTE Capacity & Speeds, Targets 1M Subs in 2013

by Philip Kendall | 4月 09, 2013

EE announced upgrades to its LTE network today, doubling bandwidth for its 4G services starting in the next couple of weeks.  It will be allocating 2x20MHz of its 1800MHz spectrum to LTE services in 10 cities by the Summer, extending that to 98% of the UK population by the end of 2012. This will see its top speeds increase to 130Mbps and average speeds increase from the current 8-12Mbps to over 20Mbps.

The roll-out will be phased as EE matches the extra radio capacity with backhaul upgrades needed at some sites. No consideration needs to be made for phasing upgrades in order to protect GSM services in the 1800MHz band, with the remaining 2x25MHz more than sufficient to deliver high-quality voice services into the remaining 2G customer base.

EE is also planning field trials of LTE-Advanced and VoLTE before the end of 2013, with LTE-A seeming to be the greater driver at the moment: its current CSFB-based voice services are performing very well and the operator would like to see much greater VoLTE device availability before making a commitment there.

For the first time, EE has also discussed customer targets for LTE, aiming for 1 million postpaid customers by the end of 2013. It released two useful statistics about current subscriber growth:

  • 1 in 4 new consumer and SME customers are picking LTE;
  • 30-40% of Orange and T-Mobile customers with 4G phones in areas where EE has deployed 4G are upgrading to 4G (for an extra £5/month) when this offer is made to them by the customer care teams.

We view 1 million as a very achievable customer target. In fact, EE could probably go a lot higher. It had 2.7 million postpaid gross additions in 2012, so only a modest increase in the current 25% LTE share would see it hit 1 million this year. The key here is LTE needs to fit in with other targets, in particular its aim to increase EBITDA margins from 21% in 2012 to 25% by 2014 and “buying” LTE growth through aggressive device subsidies or removing the service price premium is not going to help there.

Strategy Analytics' Wireless Operator Strategies team will be releasing a more detailed competitive assessment of this announcement for clients later today.

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