BT concedes 5G premium could be unsustainable - Mobile World Live

BT concedes 5G premium could be unsustainable

02 AUG 2019

BT warned it may not be able to continue charging an additional cost for 5G given tariffs announced by rivals, with the operator’s executive team vowing to take decisive action to respond to competitive pressures.

During its fiscal Q1 earnings call, BT Consumer CEO Marc Allera (pictured) and group CEO Philip Jansen bemoaned the 5G strategies of its market rivals.

“We launched with a premium price for 5G and it looks like the market may not be able to sustain that premium because it looks like people aren’t in the same position we are,” Jansen said.

Allera added: “With all the investment in 5G and the fact it’s a faster, better network, we thought it would be logical to have a small premium for 5G, others have not seen that logic.”

BT’s EE was first to market with 5G in the UK at the end of May, but since then Vodafone UK switched on the service alongside unlimited tariffs, 3 UK announced it would not charge customers extra for the new network technology, and O2 and MVNO Sky confirmed their plans to make a strong play in 5G.

Market aggression
Outside of 5G, Allera described the telecommunications market as “significantly more competitive and aggressive than it was last year,” while noting the importance of recruiting customers to premium converged fixed and mobile service BT Plus. This, he added, would likely have a positive impact on churn.

Jansen used the company’s earnings statement to hail progress in the first part of its financial year, including with the launch of 5G, but noted the company needed to take “decisive action” to respond to short term pressures.

“In building a better BT for the future we need to be even more competitive,” the executive said. “We will continue to take decisive action, including on price, to further strengthen our customer propositions and market position, both to respond to any short-term market pressures and to capitalise on longer-term opportunities.”

During its fiscal Q1 (the three months to end-June), the company made a net profit of £505 million compared with £549 million in the same quarter of 2018. BT said the two figures were not directly comparable due to a change in accounting standards. Revenue was broadly flat at £5.6 billion.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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