Americans pay too much for their LTE plans

American smartphone owners are taking a bath on LTE and 3G pricing compared to European mobile consumers, a new study indicates. Verizon Wireless subscribers pay $7.50 per gigabyte on that carrier’s LTE network versus an average of $2.50 in Europe, for example. Even more shocking: Sweden’s LTE users pay as low as 63 cents.

According to the London-based GSM Association, despite the U.S. being the largest LTE market in the world, Americans pay much more for the superfast wireless technology than anyone else. The reason boils down to fewer choices… //idownloadblog.com 

Opinion: What is the best way for operators to price 4G LTE?

When it comes to monetising innovation, 4G LTE should be considered a pivotal opportunity.

Historically, operators have exhibited anomalous charging: every industry except mobile operators charges for speed.

When 3G launched there was a clear “go-to-market” pattern in most markets.

Prices per month were static or decreased, data allowances remained constant or increased – effectively giving more speed for less money!

So, how do you maximise revenue from 4G LTE?

There’s no general answer: as always, it depends on several factors regarding the operator’s situation and positioning:

1. Internal perception of 4G LTE: is it driven by technology or marketing? 
2. Data market maturity: what are your subscriber growth expectations? 
3. Operator market position: are you a leader or a challenger? 
4. Current 3G network utilisation: is it almost full or does a capacity surplus remain? 
5. Brand promise/proposition: are you a value brand or a no-frills brand? 

//eurocomms.com

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.

Source

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.

\\wirelessintelligence.com

Analytics: LTE operators adopt next-generation pricing models

New report from Wireless Intelligence. Based on survey of 65 of those operators, almost half of them have used the deployment of LTE as an opportunity to introduce a new form of pricing for mobile broadband services. This new strategy, which supersedes the earlier unlimited data model, uses download/upload speeds as well as data allowances to differentiate on price, allowing operators to make more efficient use of their high-speed network capacity in terms of generating revenues and preserving margins.

The speed-based tariffs are most common in Europe, where 90% of operators surveyed offer them (based on data accurate at the end of July 2012). These tariffs are less popular across the Middle East, Asia Pacific and Africa, and least prevalent in the Americas where they are yet to emerge.

\\wirelessintelligence.com

LTE Series: LTE Pricing – Trends and Outlook

Webinar presenter: Stephen Hartley, Principal Analyst – Telco Strategy, Ovum

Date and time: Thursday 28th June at 10am UK

Join us for this free webinar brought to you by Ovum as we address the following:

• Assessing LTE prices at and since launch
• The development of LTE tariff approaches: Limited or unlimited?
• The future outlook for LTE tariff models 

You can view the record of webinar  (registration needed).