Price of 4G LTE: right now you pay 20% premium over 3G, but competition will push it down
Still, the growing competition is expected to push prices down in the near future.
We’ve already seen the first changes in South Korea where SK Telecom had to increase data allowance for its $55 plan from 3GB to 5GB. Similar price and data allowance tunings have been made in Norway, Hong Kong and the United States.
Interestingly, right now 4G LTE is cheapest not in the United States, where it is most widespread, but in Hong Kong, which launched a 4G network in November last year.
Still, it’s clear that the nascent LTE is an opportunity carriers aren’t likely to miss.
"There will be a premium [for LTE]. The model with HSPA+ has made it clear that customers will pay," France Telecom's CEO Stephane Richard said. "We want to accelerate the LTE rollout in France in order to get ahead of the competition."
In a nutshell, prices will come down, and we have the first signs showing right now. The real question is how fast.
source: Fierce Wireless
Compared to 3G data pricing, 4G is around 20% higher than 3G for the equivalent data-plan but there are signs 4G tariffs will succumb to the downward pull of competition sooner rather than later. "In South Korea, SK Telecom has cut its 4G pricing to remain competitive. Their 'LTE 62 Plan' for smartphones used to be priced US$55.04 for 3 GB of data, but the monthly download quota has now been increased to 5 GB. ABI Research has seen similar 4G mobile data quota and/or pricing revisions in Norway, Hong Kong, and the US," said Jake Saunders, VP for forecasting at ABI Research.
According to ABI Research's cross-country comparison of mobile data pricing, the world's cheapest 4G data plan is currently on offer by CSL Hong Kong, which launched its 4G service in November 2011. For 3G mobile data, the lowest tariff can be found in Singapore. Singapore's M1 offers a 4 GB data plan for the remarkable tariff of US$9.62.
"4G technology has given operators, not just greater download speeds, but also greater capacity. Therefore there is a degree of price elasticity," added Research associate Marina Lu. "As 4G devices come down in price, operators will be keen to increase 4G market-share. Cutting tariffs, or boosting data quotas, will be tempting but they need to make sure they achieve greater overall returns."
Voice tariffs are also benefiting from LTE. A number of operators are rolling out Voice over LTE (VoLTE). From analysis carried out by ABI Research into VoLTE services, the higher fidelity offered by VoLTE could help overcome the decline in voice-related ARPU. However, VoLTE is not being priced at a premium over existing circuit switched mobile voice services.
For more information, please visit ABI Research's "Mobile Data Price Tracker." This study is part of the firm's Mobile ARPU Database Service, which also includes additional Market Data products, ABI Insights, and analyst inquiry support.
ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research's worldwide team of experts advises thousands of decision makers through 70+ research and advisory services.
1. tedkord (Posts: 4281; Member since: 17 Jun 2009)
And Lowell the Liar told us the year before Verizon deployed LTE that it would be cheaper for Verizon to supply, and prices would be cheaper for customers.
2. vzwcooter (Posts: 2; Member since: 24 Sep 2012)
The year before that they didn't have the iPhone sucking the life out of the company's profits
5. TheMan (Posts: 373; Member since: 21 Sep 2012)
I remember that statement every time I look at the price of Verizon's data plans. They are charging not on the margin, but what the market will bear -- fiduciarily responsible, but frustrating nonetheless
11. tuminatr (Posts: 656; Member since: 23 Feb 2009)
once they pay for the network the price will come down
3. shiftmobile (Posts: 10; Member since: 22 Nov 2011)
There are no difference in data pricing on Verizon or AT&T between 3G and 4G. They are the same! Sprint charges $10 bump for having a 4G phone regardless of if you're in a 4G area.
4. laheelahee (Posts: 213; Member since: 09 Apr 2012)
i thought they charged $10 for having a smartphone.. 3G/4G both?
6. chebner (Posts: 119; Member since: 17 Oct 2011)
Yes Sprint's $10 premium data charge for 4G changed to a premium data fee for any smartphone, 3G or 4G, quite some time ago. As a result all smartphones have a $10 monthly surcharge.
7. Beholder88 (Posts: 80; Member since: 30 Mar 2012)
I'd like to see the research numbers on this study, as pricing for a 3G data package is exactly the same as a 4G data package. Maybe it's because it's faster and people use more, and then are more likely to go over an allowance and incur overage?
9. DSmithee (unregistered)
And then there's Verizon--forcing unlimited calling on anyone who wants to sign up. Sorry, Big Red--I only need a few hundred minutes a month, and don't want to pay $100 a month before taxes for 2GB of data.
10. dragonstkdgirl (Posts: 144; Member since: 07 Apr 2012)
The old plans are still available in my system - ask a rep nicely and they might sign you up on an old plan.