Feature Article

February 03, 2014

4G LTE Viewed as Less Premium as it Becomes More Ubiquitous

Since the first 4G services started popping up back in 2009, the shift in the way this tier of next-gen data has been treated is noteworthy. Indeed, a new report from Tariff Consultancy, an international telecoms tariff research and consultancy company, which highlights trends in 4G LTE pricing suggests that, while 4G services were once treated as premium, they are now the standard for mobile data applications.

This is thanks largely to mobile operators like Verizon, a company that has consistently pushed the bar as far as LTE speeds and capacity are concerned for years now. In fact, the provider upped its LTE capabilities as recently as December, bringing downlink speeds as high as 80 Mbps in a network that covers 95 percent of the U.S. population. This push to make LTE ubiquitous has forced other carriers — such as Sprint, which still offers 2G data in support of M2M solutions — to follow suit.

As such, the majority of LTE plans are now integrated within a broader mobile data tariff structure. In other words, pricing is primarily based on monthly data allowance, rather than the type of mobile network used. As Tariff Consultancy puts it, mobile network operators (MNOs) now offer 4G LTE for free to maintain an existing mobile data price point.

Based on a sample of 50 MNOs that offer 4G LTE services, 26 percent offered the service at the same price as 3G HSPA at the time of its launch. These days, the percentage is much higher with more operators following suit by the day.

Likewise, the number of 4G LTE data bundles on offer has grown since 2010 and 2011 to cover a range of price points. This is expected to continue in the future as well, with more pricing models popping up to better accommodate a wider range of subscribers. A good example of this is Verizon’s new 250MB option added to its “Share Everything” plans last month.

This experimentation with the pricing of 4G LTE services suggests that MNOs are looking to find the “optimum package,” but there likely isn’t a single one. Regardless, Tariff Consultancy believes that operators will have to work harder going forward to maintain premium price points and 4G LTE alone is no longer sufficient to justify them.

Edited by Ryan Sartor

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