Feature Article

October 15, 2012

4G LTE Service in US Costs More than in Europe: Study

It’s expensive to have the latest phone service in the United States. Prices for 4G LTE service appear higher in the United States than in other regions, such as Europe.

Verizon Wireless charges $7.50 for each gigabyte of data downloaded over its LTE network in the United States, The New York Times reported based on a new study by the GSM Association. That’s three times the average of $2.50 in Europe.

It is also over 10 times the cost in Sweden, where a gigabyte can cost 63 cents.

It is true that the Verizon Wireless LTE plan used in a recent study offered unlimited voice minutes, unlimited text, picture and video messages shared among 10 different data-capable devices and a mobile hotspot on the smartphone, Brenda Raney, a spokeswoman for Verizon Wireless, told The Times.

A data-only plan would cost $5.50, she added. That price is over twice the European average, The Times said.

In addition, as of June there were 27 million LTE subscribers globally. About half of them were in the United States, according to TeleGeography. 

South Korea was the second-largest market, with 7.5 million users, and Japan had 3.5 million users, which was the third largest market. Germany has the most users in Europe.

In his analysis, Calum Dewar, a Wireless Intelligence analyst, said higher LTE prices in the United States exist for a few reasons, The Times said. Verizon and other U.S. operators sell LTE as part of a larger mobile package. European operators often sell LTE as a stand-alone service.

Also, U.S. operators are phasing out unlimited data plans. In Europe, the trend began two years ago. And in the United States, users can get LTE on a per-use basis from discounters.

In addition, Europe has more operators selling LTE – some 38 of the 88 LTE operators globally. This compares to the United States, where Verizon Wireless and AT&T Mobility were the only U.S. operators selling LTE nationally until July.

3G also tends to cost more in the United States.

In addition, J. Scott Marcus, a former Internet adviser at the FCC and now an analyst in Germany, said Europeans appear relatively restrained in calling and mobile surfing when compared to U.S. users, The Times said.

In addition, higher prices are leading to the slower adoption of smartphone services, Jonathan Dharmapalan of Ernst & Young told The Times.

“The No. 1 reason for customers’ discontinuing their use of a smartphone service or not taking the option is the fear of overspending,” Dharmapalan said.

One report complained that the study had some outdated information and didn’t include information about AT&T, according to App Advice.

In a related matter, MobilityTechzone reported that Sprint is adding 4G LTE to 22 more U.S. urban areas in coming months.

Edited by Braden Becker

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