One of the big questions that is facing smartphone providers these days is how they are going to deal with the growing number of people who are using 4G phones and mobile devices. As companies roll out their 4G networks, more and more people are using them to surf the Web at speeds they couldn’t approach in the past. Some companies have responded by charging higher prices for 4G data plans, with an average increase of 20 percent compared to 3G data plans.
A report by ABI Research shows that while cellular carriers, especially those across the pond, are currently charging more for data plans that include 4G speeds, those prices will eventually come down. Part of the reason for a price decrease appears to be that the companies will be competing harder with each other, and will have to lower the prices in order to keep profits rolling in.
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It is also interesting to note that North America is certainly not dominating the market when it comes to the rates for 4G data plans. CSL Hong Kong currently offers the lowest 4G data plan rates after having rolled out their network in November of 2011. ABI Research associate Marina Lu laid out why she believes that the world will be seeing a fluctuation in the pricing for 4G networks over the next few months.
“4G technology has given operators, not just greater download speeds, but also greater capacity. Therefore there is a degree of price elasticity. 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.”
While there appears to be a big contrast between what companies are charging for those 4G networks at the moment, it doesn’t appear that contrast will last that long. The interesting thing to watch is how quickly the major companies make the adjustment and how those adjustments are greeted by the general public.
Edited by Brooke Neuman