Compared to 3G data pricing, 4G is around 20% higher than 3G for the equivalent data-plan but there are signs 4G tariffs will succumb to the downward pull of competition sooner rather than later.
“In South Korea, SK Telecom has cut its 4G pricing to remain competitive. Their ‘LTE 62 Plan’ for smartphones used to be priced 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 ABI Research’s cross-country comparison of mobile data pricing, the world’s cheapest 4G data plan is currently on offer by CSL Hong Kong, which launched its 4G service in November 2011. For 3G mobile data, the lowest tariff can be found in Singapore. Singapore’s M1 offers a 4 GB data plan for the remarkable tariff of US$9.62.
“4G technology has given operators, not just greater download speeds, but also greater capacity. Therefore there is a degree of price elasticity,” added 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 tariffs are also benefiting from LTE. A number of operators are rolling out Voice over LTE (VoLTE). From analysis carried out by ABI Research into VoLTE services, the higher fidelity offered by VoLTE could help overcome the decline in voice-related ARPU. However, VoLTE is not being priced at a premium over existing circuit switched mobile voice services.
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