UK Operators Bet on Priority Access to Revive Consumer Spending

UK operators EE and VodafoneThree both recently unveiled priority mobile services for consumer customers. In each case, their aim is to bolster spending and drive a better return on network investment amid enduring industry struggles to find new sources of growth.

The moves are a welcome antidote to the cut-throat competition that’s stirring waves of activity in the entry-level area of the UK mobile market, largely thanks to a booming mobile virtual network operator (MVNO) sector. With so much focus on low prices, it’s refreshing to hear about efforts to find new value.

Vodafone’s offering — called SuperMobile — is based on the pillars of speed, reliability and security. As we noted in our report VodafoneThree Announces SuperMobile and Vodafone TV, customers can access the new service for an extra £3 per month, depending on their plan. EE’s offering, announced two weeks earlier, is called Fast Lane and is more targeted as it’s only included in the company’s new premium Full Works Plus plan. Fast Lane costs £5 per month more than EE’s current Full Works plan.

The underlying technology for both services is network slicing, a major capability of 5G standalone that’s long been touted as a growth opportunity for the industry. Slicing is usually considered to be mostly for enterprise use, so it’s interesting to see the concept playing a role in the consumer market. Outside the UK, other examples of its use include Enhanced Video Calling from Verizon and 5G+ Gaming from Deutsche Telekom, both of which we reviewed in our Insight Series report: Operators Eye New Consumer Opportunity in Priority Mobile Access.

EE’s and VodafoneThree’s offerings are likely to be most effective in congested locations such as train stations and stadiums where heavy demand can significantly affect performance. FDM CCS Insight’s latest consumer research found that a more-reliable service in busy places is one of the top improvements that respondents want from their mobile provider. The operators are addressing a major customer frustration that will become increasingly relevant as demand for content increases and AI uses develop.

The big question is, of course, whether people are willing to pay. Our UK survey from December 2024 offered hope: 35% of respondents said they’d be happy to spend £5 more per month for priority access. Among people living in London, this jumped to 67%.

The concept of paying more for a premium service is well-established. Close to 50,000 vehicles use the 27-mile M6 toll road in the UK every day, for example. With promised time savings of up to 25 minutes, owners of standard (class 2) cars now pay £12 for the privilege. And at airports, millions pay extra for either a fast lane at security or to board the plane ahead of others.

Given how ingrained connectivity is in many areas of our lives, we might expect Fast Lane and SuperMobile to have little trouble attracting customers. But the mobile industry has a poor track record of getting people to spend more for network enhancements. For example, premiums for 4G and 5G services were short-lived as rivals moved to offer the technology for free. And there’s a challenge with how to position the new service too: for years the industry has pushed people to upgrade to 5G plans, and now it’s suggesting a super-charged new service offers a better alternative.

Another problem is that network slicing only works in areas of coverage of 5G standalone. This could cause confusion and disappointment among people unaware of when or where they can expect the preferential service.

Net Neutrality Could Limit Potential

The long-term potential for network slicing is contingent on regulation, notably the controversial concept of net neutrality. A goal of the UK regulator, Ofcom, is to ensure that the traffic carried across the nation’s broadband and mobile networks is treated equally.

In 2023, Ofcom clarified its position on net neutrality, confirming that operators are allowed to offer “premium quality retail offers” aimed at certain consumers’ needs. This appeared to legitimize offers like SuperMobile and Fast Lane, which don’t distinguish between different types of content.

However, at the recent Connected Britain event, operators called for greater flexibility in the rules to enable them to allocate network resources to specific services. For example, they could prioritize a certain video conferencing app or a connection at an electric-car charger.

The industry argues that relaxing the laws would help it exploit recent technology developments that would ultimately spur further network investment.

The pleas were timely as the government nears completion of its much-anticipated Mobile Market Review. As a part of this process, it’s promised to take another look at the net neutrality framework. This makes sense as the original concept was designed for an entirely different era of connectivity.

I hope the review leads to greater leniency. Customers in the UK benefit from some of Europe’s lowest-priced plans, but operators still need to spend billions just to keep up with demand. It was alarming to see the UK languishing in 61st place in a recent global ranking of mobile download speeds by testing company Ookla, trailing countries like Armenia and Kazakhstan.

But net neutrality is a complex issue and there are valid concerns that watering down the rules could end up favouring wealthier companies that can simply buy priority access and sideline their rivals. This could hinder small businesses and technology start-ups.

Whatever the outcome of the review, the concept of offering some form of priority access or a segregated service is here to stay. Now it’s up to customers to decide if it’s worth paying for.