Do you have a 4G phone? I’m guessing since you’re a Fool that you probably don’t (most Fools don’t bother).
Anyway, they’ve been available for a good while now through EE, which is a joint-venture between Orange and T-Mobile.
EE has gained first-mover advantage and has already managed to sign up 300,000 customers. It has also embarked on a heavy marketing campaign so that people whose contracts have not yet ended (but who wish to use 4G) are fairly likely to become customers of EE, since they associate 4G with EE.
Therefore, I’m dubious as to whether Vodafone (LSE: VOD) (NASDAQOTH: VOD.US) can make a go of its own 4G offering.
Vodafone plans to launch 4G in London at the end of August, with the company then rolling out 4G across a further 11 cities in the UK by the end of the year.
It looks set to bundle either Premier League football or free music into its 4G offers, as well as unlimited calls and texts. These offers are made possible by content deals struck with Sky Sports and Spotify.
By doing so, Vodafone is attempting to differentiate its offering — a different angle than that pursued by EE thus far, which relies upon the sheer speed of 4G to sell its contracts.
My own feeling, though, is that it’s too little, too late from Vodafone.
As mentioned, Vodafone is behind the curve: EE is already viewed as ‘the’ 4G network, and it may prove difficult for Vodafone to knock the joint-venture off its perch.
Furthermore, differentiating its product may prove tougher than it realises. Many smartphone users already have Premier League football and Spotify on their mobiles, so they may view Vodafone’s offering as not being all that tempting.
Of course, Vodafone is often viewed through rose-tinted glasses by income-seeking investors. Certainly, its yield of 5% is attractive, while its price-to-earnings ratio of 12.4 is decent value when compared to its sector on 12.8 and the FTSE 100 on 15.2.
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> Peter does not own shares in Vodafone. The Motley Fool has recommended shares in Vodafone.