LTE mobile broadband pricing set to decline by 60% over next 5 years

A new report published by Tariff Consultancy Ltd (TCL) finds that LTE mobile broadband pricing will fall by around 60% over a 5-year period as more operators adopt the technology.

A new report published by Tariff Consultancy Ltd (TCL) finds that LTE mobile broadband pricing will fall by around 60% over a 5-year period as more operators adopt the technology. By the end of 2016 TCL forecasts that there will be over 250 million users of LTE mobile broadband services, but average pricing per subscriber will decrease to around $26 per month – a decrease equivalent to more than 60% in LTE pricing over the 5 year period.    

TCL (London, England) research finds that the average price worldwide for a top of the range LTE mobile broadband service is currently $65 per month, typically based on a Post Paid 24 month contract term. The average LTE mobile broadband price per GB ranges from $0.65 up to $13 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, says TCL.  

But, there is already evidence of price erosion from selected LTE mobile broadband providers. Telstra (Melbourne, Australia) currently offers its BigPond USB 4G product with an 8 GB monthly data user allowance for the equivalent of $39 per month, against $49 for a 4 GB monthly data user allowance reported at the time of launch. And in Singapore M1 (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.

As of the end of 2011 around 60% of commercial LTE services have been launched so far in Europe. In 2012 more LTE networks will be launched in other regions including the Asia Pacific and South America with LTE pricing set to become more competitive as LTE becomes a mass market service and enters other consumer segments using increased download access speeds as a key differentiator.

The average theoretical download access speed across all LTE providers is in excess of 80 Mbps, with the most common download speed cited being 100 Mbps. It is the high download access speeds that are the main differentiator for LTE against other types of Mobile Broadband.

Average monthly user data allowances for LTE mobile broadband services are currently 22 GB per month – but can be as high as 80 GB per month with allowances for LTE operators in North America being typically lower.

In the study, 6 LTE providers offer separately an “unlimited” monthly user data allowance which is generally subject to an operators’ Fair Usage Policy (FUP). The initiative indicates that currently the LTE mobile broadband service is being positioned as a premium product, and is not currently subject to the same usage constraints that can face the 3G mobile broadband product, at least in the short term.