Fixed line or wireless, Internet users instinctively want more network speed, and new generation 4G mobile broadband networks offer that…but at a price. 4G data pricing is around 20% higher than that for the 3G-equivalent data plan, according to a new study from ABI Research. That said, there are signs that 4G data plan prices will come down sooner rather than later due to increasing competition.
South Korea is one country where ABI researchers already see this happening. “In South Korea, SK Telecom has cut its 4G pricing to remain competitive. Their ‘LTE 62 Plan’ for smartphones used to be priced at 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 a comparison of mobile data pricing included in ABI’s Mobile Data Price Tracker service, CSL Hong Kong, which launched its service in November 2011, offers the world’s cheapest 4G mobile data plan at present. The lowest cost provider of 3G mobile data service is Singapore M1, which offers a 4GB data plan for $9.62.
“4G technology has given operators, not just greater download speeds, but also greater capacity. Therefore there is a degree of price elasticity,” commented 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 service is also benefiting from the commercial introduction of 4G LTE service as some operators begin to deploy Voice over LTE (VoLTE), ABI’s research team noted. VoLTE’s higher fidelity “could help overcome the decline in voice-related ARPU,” they stated — especially since VoLTE is not being priced at a premium over existing circuit switched mobile voice services.