Vodafone pens deals with Sky and Spotify to win 4G fight

Vodafone has announced plans to enter the already fiercely competitive 4G market in the UK and will try and tempt customers to choose it over rivals EE and O2 with content deals in partnership with Sky Sports and Spotify as well as a three-month unlimited data offer.  

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The operator will launch its “ultrafast” 4G service on the same day as O2 flicks the switch on its offering, 29 August, in London before a roll-out in 12 cities including Birmingham, Manchester and Glasgow by the end of 2013. It claims it will cover 98 per cent of the population by the end of 2015.  

Its flagship 4G tariff, Red 4G, will offer customers two choices. They can opt for a service with Sky Sports Mobile that will allow them to stream live sport or one with Spotify Premium, which offers access to the streaming service’s 20 million plus database of songs. Both are available from £26 per month for a 12-month contract, matching O2’s cheapest offer and both provide customers with unlimited data for three months.

Those opting for the lowest-cost contracts will receive the content services for six months and will then be charged £4.99 per month for Sky Sports Mobile TV or £9.99 per month for Spotify Premium thereafter, whereas the more expenisve tariffs will offer one of the content services for the whole length of their contract, but be charged once this comes to an end.

Guy Laurence, CEO of Vodafone UK says in a statement the Sky and Spotify deals mark it out from rival services already offered by EE and O2.

“With 4G, speed is just the start: it’s what you do with it that really matters. We are taking 4G into a new league by offering sport; and changing the tune with all the music you could want. 4G is finally worth getting and there’s plenty to look forward to…”

Ernest Doku, telecoms expert at uSwitch.com, agrees the partnerships do provide Vodafone with an advantage.

“It [Vodafone] has managed to provide clear and tangible benefits to making the leap to 4G by offering access to Sky Sports and Spotify, two brilliant ways to truly demonstrate the value of great speeds on the move.

“At a time where many have been unconvinced by the virtue of superfast internet on their mobile, the pull of having access to millions of songs or all the goals in the palm of your hand as part of your monthly tariff might just be too good to pass up.”

However, Kester Mann, senior analyst operators at CCS Insight, says the announcement is “underwhelming” and roll-out speed “disappointing”.

“The leisurely roll-out is particularly disappointing for Vodafone’s ambitions in the enterprise market. EE is making impressive progress targeting this sector which was previously dominated by Vodafone and O2. Today’s announcement could prompt it to further step up its push for high-spending corporate accounts.

“Vodafone’s announcement is underwhelming and there is nothing ground-breaking in its initial plans for 4G. The limited roll-out supports our view that the operator does not feel fully ready to bring 4G services to market but needs to fulfil a prior commitment to launch before the end of the summer. Having initially expected a start date in either April or May, we believe that Vodafone’s progress has been constrained by challenges associated with its network sharing agreement with O2.”

SIM-only customers signing up for 12 months will be charged £26 per month if they already have a 4G ready phone. Those without compatible phones have to take a 12 or 24-month deal to obtain a phone and 4G service and will be charged £52 or £34 respectively.

Vodafone claims it has invested more than £900m in its 4G network this year alone.

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