LTE Mobile Broadband to Become 60% Cheaper by 2016

Five years from now, there will be over 250 million users of LTE Mobile Broadband services around the world, and the average pricing per subscriber will be around 20 Euros per month. That’s what a new report published by Tariff Consultancy Ltd (TCL), titled LTE Mobile Broadband Pricing 2012, says TCL also found that LTE is currently being promoted as a premium Mobile Broadband product based on a high theoretical download access speed.

LTE Mobile Broadband Pricing 2012 evaluates pricing from around 30 LTE Mobile Broadband providers which are mainly located in Europe, North America and the Asia-Pacific regions.

TCL has forecast LTE Mobile Broadband subscriber numbers and revenues for the 5 year period to the end of 2016, arriving at a conclusion that the pricing will decline by around 60 percent in five years, as more and more operators adopt the technology.

Margrit Sessions, Managing Director of Tariff Consultancy Ltd believes LTE Mobile Broadband services will start to adopt the same mass market characteristics of the existing Fixed Broadband and 3G Mobile Broadband services with increased speeds but price competition.

The onus will be on the operators to bundle other services into their LTE offer and develop more compelling user-based applications and content services as well as simply providing large LTE Mobile Broadband access capacity.

High download access speed is the USP of LTE Mobile Broadband. Currently, the average theoretical download access speed across all LTE providers is more than 80 Mbps, with many providers boasting speed of 100 mbps and Zain, a provider in Saudi Arabia claiming download speeds of as high as 150 Mbps.

Also, the report implies LTE Mobile Broadband service is not currently subject to the same usage constraints that can face the 3G Mobile Broadband products, at least in the short term.

Average monthly user data allowances for LTE Mobile Broadband services are currently 22 GB per month, but the data allowance in North America is much lower. But there are cases where the allowance is as high as 80 GB per month.

The TCL study also shows that the average LTE Mobile Broadband price in Euro per GB ranges from 0.5 Euro up to 9.9 Euro per GB of data mobile user allowance. Most LTE operators reduce the service access speed (down to speeds as low as 64 Kbps) when the monthly user data allowance is reached, with the speed reduction particularly prevalent in Europe. And, the average price for a top range LTE Mobile Broadband is 50 Euro per month.

Around 60 percent of commercial LTE services have been launched in Europe by the end of 2011. And more LTE networks will be launched in other regions including the Asia Pacific and South America next year.

LTE pricing is set to become more competitive as it becomes a mass market service. The study has also found evidence of price erosion. For instance, Telstra (Australia) currently offers its BigPond USB 4G Mobile Broadband product with an 8 GB monthly data user allowance for the equivalent of 30 Euro per month, against 38 Euro for a 4 GB monthly data user allowance reported at the time of launch.

In Singapore, Mobile One is offering its Next Generation Mobile Network equivalent LTE service to existing M1 customers with a 40% discount off the monthly list price.