Mobile Now Plays Key Role in Boosting Average Access Speeds

There has been a marked increase in advertised average download speeds for broadband services across the 34 OECD plus six non-OECD countries over the last quarter, according to Strategy Analytics.

Also, almost 33 percent of all plans now offer a download speed of 45 Mbps or above, a four percent increase over the previous quarter.

Notably, those average download speeds are a result of increased availability of fourth generation services across OECD countries.

While 4G services have pushed speeds up, pricing of 4G remains in line with 3G. A tablet user, requiring 5GB of data per month will pay 35 percent more for a 4G service compared to 3G, on average, but the plan speeds will be almost five times as fast.

These higher speed services are available from 96 of the 121 ISPs tracked by Strategy Analytics.

Subscribers to these services can expect to pay between USD45 and USD66 per month, on average, using the purchasing power parity method, depending on the bundle of services they choose to buy.

At least in part, pricing decisions by firms such as Vodafone could play a role in heightening the role mobile plays in the overall Internet access business.

Vodafone’s U.K. LTE network will launch on August 29, 2013, using a pricing strategy that essentially does not represent a 4G premium pricing model, which is what most 4G service providers have tried to do. To be sure, 4G service will cost more than a 3G plan with the same amount of usage.

Basically, Vodafone is requiring a £5 per month surcharge for LTE, but which adds double the 3G data allowance and also gives consumers the added benefit of bundling in either Spotify Premium or Sky Sports Mobile TV.

So, yes, there is a price premium, but for a different service, with a different value-price offer.

For example, the differences in SIM-only standard “Red” and “4G-ready” options highlight the fact that at each price point there is more value in the 4G option.

Red (3G) costs £21 per month for unlimited voice and text and a 1GB data usage allowance.

Red 4G-ready costs £26 a month for unlimited voice and text usage domestically and a 2GB data allowance, plus either Spotify or Sky Sports. The other plans offering bigger usage buckets likewise feature the “double the usage” feature.

What is surprising is the ability of mobile access services to rapidly affect the overall Internet access speed, something that in the past has represented a “drag” on average access speeds, to the extent that mobile access speeds were so much slower than fixed connections.

Now the tables are turned.