Tuesday, January 7, 2014

Europe has Lowest LTE Retail Prices: Good for Consumers, Not Service Providers

Average Long Term Evolution 4G mobile service  pricing in the European Union  is $34.89 per month (average monthly data allowance of almost 20GB) and is the lowest of the six regions surveyed by Tariff Consultancy.

For consumers, that is the good news. For service providers, that is the bad news. In fact, LTE service providers in France offer LTE services without any pricing premium over 3G data plans.

And though observers and practitioners alike might have hoped that LTE could be uniformly introduced as a “premium” offer, that has not universally been the case.

In the United Kingdom, LTE prices are certain to come under pressure once 3 launches its LTE network, as 3 has said it will not charge a premium for LTE data access.

The pricing pressure should not be a surprise, as many surveys had suggested 4G service pricing would be an issue.

In most European markets, however, new adopters of smartphone service expected to pay less, about 28 percent to 31 percent less--than the amount existing subscribers said they were willing to pay.

And that rate typically was less than the current average market price for 3G service, researchers at McKinsey had found.

Should that trend spread, mobile service providers will find they have to work harder to reduce costs, since LTE might impose capital spending burdens with little direct revenue upside.

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