Business Technology

Friday 15 November 2019

Adrian Weckler: 'Hi 5? Not at the prices telcos are charging for next-gen data speeds'

English footballer Alex Oxlade-Chamberlain is the first person to try out Three’s new Call of Duty 5G experience in the UK. The operator has yet to dip its toes in the Irish 5G market. Photo: PA
English footballer Alex Oxlade-Chamberlain is the first person to try out Three’s new Call of Duty 5G experience in the UK. The operator has yet to dip its toes in the Irish 5G market. Photo: PA
Adrian Weckler

Adrian Weckler

Ireland's new mobile 5G packages are like the early days of multimedia text messages. Operators thought that customers would pay 50 cents per texted photo. But no one would.

Instead, it helped to create replacement platforms such as WhatsApp and Facebook Messenger, which have killed almost all operator messaging income.

Now, I don't want to make a literal equivalent. So to be absolutely clear, 5G won't flop. It is indisputably the future of Irish mobile networks.

But Eir and Vodafone have launched it in too restrictive and expensive a manner. They've done it in a way that will minimise interest in the technology and give a tardy competitor, Three, new hope.

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Eir's launch last week saw packages starting at a whopping €60 to €70 per month for phone access.

(Yes, there's a tenner discount if you're an Eir broadband subscriber. And yes, a bit of that monthly €70 goes to part-subsidise the new 5G phone you'll need, though you'll still have to pay up to €700 up front for that too.)

So you're paying 700pc more than Eir's other similarly specced services (especially GoMo) to get faster mobile data in about 5pc of the country.

The only real difference is that, for those in that 5pc of the country, with 5G you'll get 200Mbs instead of 20Mbs.

While this would be reason enough in the case of a home broadband connection, it isn't yet for mobile. The result is that most of Eir's own customers will ignore the 5G launch.

Vodafone's 5G packages aren't quite as expensive (€35 and €45 per month for Sim-only deals) and you don't have to buy a phone at the same time. But it has restricted 5G to a handful of bill-pay options. And Vodafone, being Vodafone, has bundled these super-fast 5G services with relatively small data allowances.

For example, 20GB is nowhere close to being enough for a 5G service that's used anywhere near to its potential.

So while Vodafone's offering is slightly more accessible, the limitations won't have the market hopping to sign up.

All of this inadvertently hands a lucky opportunity to Three. Ireland's second-biggest operator has badly lagged Vodafone and Eir on 5G rollout here; it hasn't even announced a contract with a network provider. But watching how its rivals have handicapped their 5G take-up, it could jump ahead when it does launch. All it needs to do is to say that all of its customers, pre-pay and post-pay, get 5G at no extra cost.

In one swoop, it reignites the branding that gave the firm its market niche for almost a decade - the data-centric network for everyone.

It could do it knowing that only a minority would actually avail of this in the first year, as none of the current crop of smartphones can actually receive 5G. (You need a new 5G phone, of which there are only four on sale in Ireland; Apple doesn't yet make a 5G iPhone.)

But even if Three pursues this tactic, it is still left with the same big question that all Irish mobile operators struggle to answer: what is 5G for?

In what way will it enhance our lives in 2019 or 2020?

For example, Eir's main mobile network priority is extending its 4G network geographically to 99pc of the country.

There is a clear and obvious commercial and user benefit to doing this, as 4G, with a sufficiently strong signal, delivers up to 100Mbs to (and through) your phone. That's easily good enough for any handset-related data requirements into the foreseeable future. It's even good enough for temporary broadband hotspots in out-of-the-way locations. I do this all the time when working outside Irish cities.

So what is the advantage in switching to a 5G plan? What do we use the extra 100, 200 or 300 megabits for? It's a hard question as there is no obvious answer. The only clear mass-market use at present for a mobile service of more than 200Mbs is as an actual broadband substitute, connecting multiple laptops, tablets, TVs and other devices in a single location at the same time.

Other than that, we haven't yet found an everyday role for such fast mobile data throughput.

Don't get me wrong: we will find a use for 5G data speeds. The past two decades show beyond any argument that products and services evolve quickly to match available data speeds and capacities.

But we just don't yet know what those specific services are in Ireland yet. So charging €70 per month, when you offer a strong 4G service with as much of a data allowance for €10 per month, won't get many people signing up.

As it happens, Eir might not care too much about its lack of 5G sign-ups. It has been overwhelmed with the number of people subscribing to its cut-price GoMo service.

At its launch last week, I posited that it could meet its initial 100,000 subscriber target by early 2020.

The way it's going now, it could actually do it before Christmas. (Although we won't definitively know how many subscribers GoMo has as Eir won't report them separately to ComReg.)

But this aggressive, disruptive new service is all the more reason why other networks now surely have to extend their 5G availability to a wider array of post-paid and pre-paid packages. Otherwise, they look positively outgunned on value.

In case you're still keen to sign up to a 5G service, the geographical rollout is sluggish.

At launch, Eir Mobile has a handful of locations in the five cities, along with some parts of Castlebar, Carlow town, Dundalk, Drogheda and Kilkenny.

Another tranche in Athlone, Bray, Ennis, Letterkenny, Sligo, Tralee and Trim is due "in coming weeks". And more in early 2020.

Vodafone is still focusing mainly on the five cities, but has only a small portion of its urban sites emitting 5G.

So in terms of availability, you may not be missing much for a while yet.

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