Vodafone Marries 5G Launch with Unlimited Data

UK operator seeks reinvention as its 5G network goes live

Vodafone’s 5G network is now live in seven cities in the UK. At an upbeat and energetic launch event, Vodafone also gave a strategy update, showing strong ambition after a turbulent few years in its home market. But the headline story today was Vodafone’s new speed-tiered unlimited data tariffs — a first in the UK.

Vodafone Unlimited will launch on 10 July 2019 to consumer and business customers, on its 4G and 5G networks. The offer is split into three speed tiers: 2 Mbps (Vodafone Unlimited Lite), 10 Mbps (Vodafone Unlimited) and unrestricted (Vodafone Unlimited Max). Pricing is £23, £26 and £30 per month respectively. Vodafone Unlimited Lite is aimed at customers who mostly want to use social apps, access the Internet and stream music; Vodafone Unlimited is suitable for on-the-go video streaming; and Vodafone Unlimited Max is for people wishing to consume data-hungry services, such as 4K TV, gaming and virtual reality.

The operator will need to explain its speed-based offerings carefully, as this is a new concept in the UK. Consumers are only just beginning to understand the value of megabytes and gigabytes; megabits per second is a largely unfamiliar term in the mobile realm. In this sense, we applaud the service-based narrative that seeks to bring the different tiers to life. Crucially, Vodafone stresses that there are no caveats to its unlimited offer, although roaming is restricted to 25GB per month.

CCS Insight has long been optimistic about the potential for unlimited data. At our previous Predictions events, for example, we predicted that the deployment of 5G networks would herald a return to unlimited data plans, and that the concept would become the default option in many advanced markets by 2023.

In a bid to kick-start what has been an underwhelming performance in convergence so far, Vodafone will launch a new brand, Vodafone Together, before the end of July 2019 alongside new tariffs and single billing. It will offer a £3 discount to customers choosing to bundle 18-month SIM-only or handset plans with its home broadband service. For a limited time, home broadband customers can receive a free Amazon Echo Plus smart speaker, which can make and receive hands-free calls in the home at no extra charge. This means that customers can take unlimited mobile data and home broadband services, plus Amazon Alexa, from £43 per month.

Vodafone also unveiled three new simplified tariff plans supporting 5G without speed restrictions: Red 1 (£11 per month, with 1GB of data), Red 2 (£15 per month with 5GB of data) and Red 3 (£20 per month with 20GB of data). Like with its unlimited plans, customers can add an entertainment pack, such as Spotify, Amazon Prime Video, Sky Sports Mobile or Now TV, for £6 per month.

Subscribers will be able to access Vodafone’s newly launched 5G network using two 5G-ready smartphones, the Samsung Galaxy S10 5G or the Xiaomi Mi Mix 3 5G, with the latter being exclusive to Vodafone in the UK. The operator insists that its range of phones targets two large yet distinct market segments wanting either a premium or an entry-level 5G device. By contrast, EE has a portfolio of five 5G devices, including smartphones from LG, OnePlus, Oppo and Samsung and a portable hub from HTC.

Pricing 5G at the same level as 4G is a message that will land well with consumers and we applaud Vodafone’s move to provision all SIM cards as “5G ready”. We believe that 5G price parity coupled with the move to unlimited data indicates a challenger mentality emerging at Vodafone UK, in contrast to its traditional premium-focussed approach.

Coverage will form a leading part of Vodafone’s 5G message. Although the network is only available in seven cities in the UK, it will expand to another 12 before the end of 2019. Furthermore, by the end of the summer, subscribers will be able to roam on Vodafone’s 5G networks in Germany, Italy and Spain. This will bring the total number of covered cities to 27, justifying Vodafone’s claim of bringing “5G to more places than any other network”.

The roaming message will play an important role in its positioning of a range of new tariffs for the enterprise market through its new brand Vodafone Business Unlimited. Anne Sheehan, director of Vodafone business, UK, said that by announcing three speed-tiered price plans for this audience, the operator is “ripping up the rule book in enterprise, too”.

Vodafone’s recent difficulties in the UK have been well documented. A disastrous migration of billing platforms was the catalyst for a sharp downturn in performance and an alarming loss of brand identity. However, under CEO Nick Jeffery it has enjoyed new impetus; financial and operational measures are improving, and we detect a far more positive atmosphere within the company. Today’s announcements could represent a huge leap forward in Vodafone’s efforts to regain former glories.