European LTE operators look to new pricing strategies

The new stady by Wireless Intelligence show that 4G/LTE data costs US$2.50 per GB on average in Europe, around half the global average of US$4.86.

The most competitive LTE market in Europe is identified as Sweden where all four of the country’s mobile operators have launched the next-generation technology. The Swedish market-leader TeliaSonera had an estimated 170,000 LTE connections in Q2, accounting for almost 3 percent of its total subscriber base, while rivals 3 Sweden, Telenor and Tele2 have also launched LTE services (the latter two via a network-sharing joint-venture known as Net4Mobility). As a result, a Swedish 4G data contract can cost as little as $0.63 per GB per month (at both Tele2 and 3 Sweden). By comparison, the best value 4G data tariff at the world’s largest LTE operator, US market-leader Verizon Wireless, works out at $7.50 per GB.

The study found that operators in Europe have used the deployment of LTE to overhaul their mobile broadband pricing models. In particular, many operators struggling with overloaded networks have taken the opportunity to phase out unlimited data deals in favour of speed-based offerings tied to data allowances in an effort to more effectively monetise mobile data.

The model is typically used by European operators to price mobile broadband offerings regardless of the underlying technology used; typical advertised maximum speeds are 7.2 Mb/s, 14.4 Mb/s (HSPA), 42.2 Mb/s (HSPA+) and 100 Mb/s (LTE), though several operators market more realistic speeds rather than the theoretical top speeds.

Tariffs are then priced in line with the advertised speeds. At 7.2 Mb/s, a 10 GB monthly allowance costs $23 on average, rising to $44 for an 80 Mb/s service (the highest speed at which a 10 GB plan is available). At the other end of the scale, an unlimited plan costs $35 at 7.2 Mb/s rising to $70 at 80 Mb/s.

Conversely, at a per GB level, the average price of data decreases as network speeds increase. The average cost per GB at 7.2 Mb/s in Europe is calculated at $6.20, dropping to around $1.15 per GB at 80 Mb/s (LTE). This is because the maximum speed rates for mobile broadband tend to be packaged with the largest monthly data allowances.

The new pricing strategies used for LTE in Europe has meant that LTE has usually been marketed as a standalone ‘4G’ service. This is in contrast to markets such as the US where LTE is usually offered as part of a wider mobile broadband package that typically includes 3G connectivity.


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