Vodafone Launches 5G in UK with Unlimited data plans

The Launch

Vodafone 5G Coverage in the UK

Having lost out to BT-owned EE, the first network to offer 5G services in the UK, Vodafone launched its 5G services offering on 3rd July with partial coverage in seven UK cities (Birmingham, Bristol, Manchester, Cardiff, Glasgow, Manchester, Liverpool and London).

In comparison, rival EE has coverage in parts of London, Cardiff, Belfast, Edinburgh, Birmingham and Manchester, which is one less location than Vodafone.

Prices of the new 5G services are capped at the same level as 4G services for both consumers and business customers. However, Vodafone is adopting a different approach with respect to data allowances by offering unlimited downloads tiered according to speed, the first time any operator has offered this in the UK. There are three offerings:

Vodafone 5G Plans

  • Unlimited Lite – costing £23 ($28.90) per month at speeds of up to 2 Mbps maximum
  • Unlimited – £26 ($32.67) at speeds up to 10 Mbps maximum
  • Unlimited Max – £30 ($37.70) for unlimited access at speeds as fast as the network and devices permit, typically 150-250 Mbps.

In addition, Vodafone has announced that it will let customers roam on 5G in 20 cities in Spain, Italy and Germany from the end of July.

Two 5G handsets are available at launch: the Xiaomi Mi Mix 3 and the Samsung S10 5G. Both operators backed off from offering Huawei 5G handsets due to uncertainty surrounding Google Android support following the US sanctions imposed on Huawei.  However, the total cost of a 5G Samsung Galaxy S10 on a 2-year contract is £1,637 ($2,062) at the cheapest advertised tariff, which means that it is being targeted predominantly at business customers.

Also planned is a fixed wireless broadband service using a new 5G home router, the GigaCube, for use in the home and office. Prices start at £30 per month for a 100 GB service or £50 for unlimited use (plus a £50 and £100 one-off upfront fee respectively).


5G Success Crucial For Vodafone UK

Vodafone is the third largest MNO in the UK after EE and O2 with 17 million customers and has seen financial losses and customer complaints in recent years. 5G represents a significant opportunity for the company and making a success of it will therefore be crucial to turn around its loss-making UK business.

The company is trying to differentiate itself from rival EE by launching a number of “5G firsts” in the UK market. For instance, it is offering unlimited data plans, for both consumers and business customers, which are priced at the same price as 4G. Given the cost of the handset contracts, these will more likely appeal to small businesses. However, companies will need to subscribe to the most expensive Unlimited Max plan to get the best mobile broadband speeds as the other offerings have heavily restricted speeds of 2 Mbps and 10 Mbps respectively.

5G Devices Portfolio Needs to Expand

With no other networks yet announcing 5G roaming plans, this could be another way that Vodafone has an early 5G competitive advantage. Another could be its fixed wireless broadband service via the GigaCube home router, although the launch date will probably be delayed as the router is made by Huawei, also known as Huawei 5G CPE Pro.

Comparatively, EE is offering two routers – 5GEE Home Router (again a Huawei 5G CPE Pro) and HTC Hub, a 5G mobile hotspot device with a touch display powered by a powerful Qualcomm Snapdragon 855 chipset running Android 9 pie which can also stream 4K video, double as an Android gaming console. EE is also offering four smartphone models from Samsung, LG, Oppo and OnePlus.

So, Vodafone will have to scale its 5G portfolio equally well in coming months to rival EE with more 5G IoT and smartphone models.

5G-Centric Services Strategy Unique for Now

In terms of its 5G value proposition, like other global operators such as Sprint in US or LG Uplus in S. Korea, Vodafone is bundling a premium cloud gaming streaming service. For the Vodafone pay monthly mobile customer, three months of free access to Hatch Premium worth £21 is included. The user can continue the subscription at £6.99 per month or cancel. Vodafone’s rivals are not offering any such unique 5G-centric service yet.

In the 5G era, operators will look to differentiate and create more value by offering 5G-centric services to drive consumer interest. 5G based cloud gaming seems to be one area in the OTT content space where operators are trying to develop some skin in the game.

EE has Early Lead and Three Ready to Launch

Three is launching 5G in London in August, followed by 24 more locations in the UK while O2 plans to launch in Belfast, Cardiff, Edinburgh and London during the summer as well.

Crucially, Three owns 144 MHz of 5G spectrum, including a 100 MHz contiguous block, which means that it will be able to offer faster speeds compared to Vodafone which only has 50 MHz. Three claims it will be the only UK operator in 2019 able to offer a true 5G experience which, according to the ITU, requires 100 MHz of 5G spectrum. Three also plans to offer a 5G home broadband service, which will be an alternative to fixed line fibre Internet. However, it has not yet released any pricing details.

Clearly Vodafone needs to capitalise on these 5G competitive advantages as quickly as possible as well as come up with other innovations as soon it will have significant additional competition from numerous other operators, not only Three and O2, but also BT, Voxi and Sky Mobile, who all have 5G networks launching at some point in 2019. So, Vodafone needs to build a differentiated advantage in terms of better 5G coverage or 5G throughput user-experience or offer a greater value proposition in terms of services and devices to keep attracting customers.

Gareth has been a technology analyst for over 20 years and has compiled research reports and market share/forecast studies on a range of topics, including wireless technologies, AI & computing, automotive, smartphone hardware, sensors and semiconductors, digital broadcasting and satellite communications.

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