As more mobile network service providers continue the ongoing decommissioning of 2G networks and start on the 3G networks, their subscribers are still considering the impact of new 4G monthly service fees.
Compared to 3G data pricing, 4G is around 20 percent higher than legacy 3G for the equivalent data plan. But there are already signs 4G tariffs will succumb to the downward pull of competition sooner rather than later, according to the latest market study by ABI Research.
"In South Korea, SK Telecom has cut its 4G pricing to remain competitive. Their LTE 62 Plan for smartphones used to be priced $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 U.S.," said Jake Saunders, VP for forecasting at ABI Research.
According to the ABI Research 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 $9.62 per month.
ABI believes that 4G technology has given operators, not just greater download speeds, but also greater capacity. Therefore there is a degree of price elasticity.
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 reasonable returns on the infrastructure investment.
Voice tariffs are also benefiting from 4G LTE. A number of mobile network operators are rolling out Voice over LTE (VoLTE). From analysis carried out by ABI Research, the higher fidelity offered by VoLTE could help overcome the decline in voice-related ARPU.
However, VoLTE is not currently being priced at a premium over existing circuit switched mobile voice services. So, that's the apparent trend at this time.