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4G Data Priced 20% Higher than 3G Data
Though ABI Research Expects Prices to Ease Slightly
by Karl Bode 08:53AM Friday Oct 05 2012
According to a new report from ABI Research, the price of 4G data (HSPA+ and LTE technology, generally) is 20% higher than 3G services. Despite the lower cost to deliver services as technology evolves, carriers have jacked up data prices (courtesy in large part to new shared data plans) in order to offset the inevitable decline of voice minute and SMS revenues. On the positive side, ABI seems to think that competitive pressures are going to drop prices eventually. "In South Korea, SK Telecom has cut its 4G pricing to remain competitive," says the firm. "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."

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Crookshanks

join:2008-02-04
Binghamton, NY

I read this last night....

.... not sure why this comes as a surprise, it costs billions of dollars to deploy a nationwide LTE network. The carriers need to recoup that money in a reasonable timeframe. The article backs up what I've been saying for awhile now, mainly that prices will come down in due course.

Something that I found interesting though, and not specifically related to data:

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.

This seems like fantasy land to me, the decline in voice usage is a generational shift more than anything else. Young people are less likely to talk on the phone than their parents, and more likely to utilize text messages/IMs/etc. I think this is a bad thing personally, as it's indicative of the continued decline in interpersonal skills, but that's another discussion.

Point being, does anybody seriously expect voice revenues to go up if the cellular carriers manage to offer superior voice quality? How many people really care about that? Of the small minority that do, wouldn't they simply get a landline, today, rather than waiting for the higher bandwidth mobile voice systems of tomorrow?
Os

join:2011-01-26
US
Reviews:
·Comcast

Re: I read this last night....

Except then they'll want to build a 5G network, and rip us off for that. It's a neverending cycle, and without some sort of regulation, it's only going to get worse unless the insatiable greed finally places all these companies outside what the market is willing to bear.
Crookshanks

join:2008-02-04
Binghamton, NY

Re: I read this last night....

said by Os:

Except then they'll want to build a 5G network, and rip us off for that.

They'll want to? I think you have that backwards, consumers want better, faster, and more reliable data networks, otherwise there would be zero incentive for a carrier to spend billions of dollars building one.

Anyway, if you think you're being ripped off, that brings us to....

said by Os:

unless the insatiable greed finally places all these companies outside what the market is willing to bear.

Oh and:

said by Os:

and without some sort of regulation

What does regulation have to do with prices? The carriers charge what the market will bear. Judging by the fact that they keep adding new data consumers, I'd say they aren't ripping us off. Do tell though, what kinds of regulations do you want to see, and how do you believe they bring prices down without also discouraging investments in network expansion?

jseymour

join:2009-12-11
Waterford, MI

Re: I read this last night....

said by Crookshanks:

said by Os:

Except then they'll want to build a 5G network, and rip us off for that.

They'll want to? I think you have that backwards, consumers want better, faster, and more reliable data networks, otherwise there would be zero incentive for a carrier to spend billions of dollars building one.

Recent study concluded that the majority were, in fact, happy enough with 3G.

(No, not going to look it up. It was posted to the front-page news, here, I believe. Feel free to disbelieve it if you wish.)

said by Crookshanks:

...what kinds of regulations do you want to see, and how do you believe they bring prices down without also discouraging investments in network expansion?

Yeah, that was SBC's argument against giving CLECs access when they initially wanted to expand their DSL footprint.

We can see how that's worked-out, can't we? Now that they've got their footprint monopoly, they want to discard it and force consumers on to the wireless network for which they whine they need more bandwidth.

Jim
BiggA

join:2005-11-23
EARTH
They basically started with LTE faster than other countries because Verizon skipped the whole HSPA+ step and was still on slow EVDO, and AT&T doesn't know how to or doesn't want to put the effort in required to build a dense urban HSPA+ network like has been done in many other countries.

88615298
Premium
join:2004-07-28
West Tenness
said by Os:

Except then they'll want to build a 5G network, and rip us off for that.

If you feel you are being ripped off then we use their services? Ok you tell us what is the appropriate pricing should be. And please tells us HOW you came to that. Hopefully you actually did some research and not just pull numbers out of your ass.

jseymour

join:2009-12-11
Waterford, MI

1 recommendation

Re: I read this last night....

said by 88615298:

said by Os:

Except then they'll want to build a 5G network, and rip us off for that.

If you feel you are being ripped off then [why] use their services?

Precisely.

I often find myself in disagreement with BF69, but on this one I agree. Don't like what they charge? Don't buy it. I don't. My wife and I feel subscription TV is also too expensive for what you get, so we don't buy that, either.

People going out and buying stuff that's too expensive for what they get, then complaining it's too expensive and "the government ought to Do Something" annoy me. Quit your whinging and just stop buying it.

I find all kinds of things either too expensive for what they return, or just plain too expensive for our budget, so I don't buy them. There are many things I may occasionally regard wistfully and think or say "That'd be neat" or "I wish I could..." and then move on with my life. Some of it is just plain beyond our means. I'd love to have a Dodge Viper, but it's well beyond our means. I thought I wanted a smartphone, but, after doing some research and pondering it, decided having some money put aside for a rainy day is more important than expensive flash and trash.

As long as people keep paying it, sellers will keep charging it. That's called "what the market will bear." It's capitalism. Yup, I think American consumers are being ripped off by wireless, subscription TV and Internet service providers. But it's their own fault for paying too much. Nobody's holding a gun to their heads and forcing them to buy the stuff.

Just. Stop. Buying. It. It's really that simple.

Jim

jseymour

join:2009-12-11
Waterford, MI
said by Crookshanks:

The article backs up what I've been saying for awhile now, mainly that prices will come down in due course.

Because, as we all know, TelComs and CableCos are known for reducing prices.

Right. Pull the other one, its got bells on

My wife and I recently, as a result of lengthy, thorough research and discussion, decided we're just going to skip the whole "smartphone" and data thing entirely. We're not even going to look at it again. Like subscription TV: Far too much for far too little.

Jim
Os

join:2011-01-26
US

Re: I read this last night....

Yes, prices will come down when we let what few firms are left merge together. Economies of scale will magically lower prices! [/industryshill]

We've heard this shit before. It doesn't work.

dnoyeB
Ferrous Phallus

join:2000-10-09
Southfield, MI
kudos:1
Reviews:
·Comcast
Whats wrong with having a smart phone that has wifi only? Ive done that for years. This is my first month having a data plan. And that plan is only $5 because I still mostly get my data over wifi.
--
dnoyeB
"Then said I, Wisdom [is] better than strength: nevertheless the poor man's wisdom [is] despised, and his words are not heard. " Ecclesiastes 9:16

88615298
Premium
join:2004-07-28
West Tenness

Re: I read this last night....

said by dnoyeB:

Whats wrong with having a smart phone that has wifi only? Ive done that for years. This is my first month having a data plan. And that plan is only $5 because I still mostly get my data over wifi.

because at some point you will want to use data and you won't be near Wi-Fi. And considering these companies are $50 per GB or more on people that don't have data plans I don't think you'll like you're bill when it comes in.
brianiscool

join:2000-08-16
Tampa, FL
kudos:1

4G

It is way over hyped!
jjeffeory

join:2002-12-04
USA

Re: 4G

This is true. 4G is over hyped. Maybe it's my aging thunderbolt, but I rarely get over 6mbps in DC area on Vz LTE over the course of about 2 years and I'm consistently having to use "3G" connections, which allow me to do the things I want to do away from wifi such as stream audio, use Google Maps, and use other basic applications. With all of the restrictions on new "4G" connections, their utility is questionable. I DO have unlimited data, but it's not that useful right now.

So, yea, 4G is over hyped... It shouldn't be priced higher, it's an incremental upgrade that should be included in the cost of doing business, perhaps like the transition from 1X -> 2G -> 3G...

88615298
Premium
join:2004-07-28
West Tenness

Re: 4G

said by jjeffeory:

This is true. 4G is over hyped. Maybe it's my aging thunderbolt, but I rarely get over 6mbps in DC area on Vz LTE

damn I get over 6 Mbps on UPLOAD over Verizon LTE. I've gotten a high as 30 Mbps on download.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Huh?

Let's see... for a lot of who would go from unlimited 3G data for $30 a month to a 1GB allotment for $50 a month (assuming Verizon), then we have the following:

1GB Usage - 167% of your original $30 a month
2GB Usage ($15 per GB overage) - 217% of your original $30 a month
3GB Usage - 267% of your original $30 a month

Man I *wish* it was only "20% higher"
--
Romney/Ryan 2012 - Put a couple of mature adults in charge.

88615298
Premium
join:2004-07-28
West Tenness

Re: Huh?

said by pnh102:

Let's see... for a lot of who would go from unlimited 3G data for $30 a month to a 1GB allotment for $50 a month (assuming Verizon), then we have the following:

1GB Usage - 167% of your original $30 a month
2GB Usage ($15 per GB overage) - 217% of your original $30 a month
3GB Usage - 267% of your original $30 a month

Man I *wish* it was only "20% higher"

What are you talking about?

People like to say "data" is $50 a month. If you actually READ the minutes and unlimited texting are also included in that $50 part. Since unlimited texting on a single line under old pricing was $20 then you can say that the 1GB is actually only $30. Of course I haven't even taken the minutes into account.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Huh?

said by 88615298:

People like to say "data" is $50 a month. If you actually READ the minutes and unlimited texting are also included in that $50 part. Since unlimited texting on a single line under old pricing was $20 then you can say that the 1GB is actually only $30. Of course I haven't even taken the minutes into account.

I'm raising 2 kids, so I am used to hearing someone say the same thing over and over again in hopes that I might believe it.

And still, you ignore the facts. The initial $40 fee for adding a Smartphone to a "Share Everything" account covers unlimited voice and unlimited texting. So the $50 a month is purely for data. If you don't want to believe me, go look at the plans themselves. The data bucket isn't sold as "unlimited texting + data", it is just "data."
--
Romney/Ryan 2012 - Put a couple of mature adults in charge.

88615298
Premium
join:2004-07-28
West Tenness

Re: Huh?

said by pnh102:

I'm raising 2 kids, so I am used to hearing someone say the same thing over and over again in hopes that I might believe it.

And still, you ignore the facts. The initial $40 fee for adding a Smartphone to a "Share Everything" account covers unlimited voice and unlimited texting.

No it doesn't. Go to this link and tell which part the texting and minutes are on?

It's CLEARLY on the data portion.

»www.verizonwireless.com/b2c/plan···erything

Here I'll even post a pic



The texting and minutes are CLEARLY a part of STEP 2 which is the data portion.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

1 edit

Re: Huh?

The chart simply proves my point. You're not getting more texts for each increase in the amount of money you pay, but rather more data.

And you still haven't proven that my claims in my original post are wrong. You are pay more, and certainly a lot more than 20%, for data. Period.
--
Romney/Ryan 2012 - Put a couple of mature adults in charge.
Crookshanks

join:2008-02-04
Binghamton, NY

Re: Huh?

said by pnh102:

And you still haven't proven that my claims in my original post are wrong. You are pay more, and certainly a lot more than 20%, for data. Period.

Single people pay more, families pay the same, or less, depending on usage.

My bill breaks down as follows:
2 x lines on 700 minute plan w/unlimited texting = $99.98
22% access discount (on base plan + 1 line): = ($19.80)
2 x 2GB data plan = $60
Total: $140.18

Equivalent level of service on the new plan:
2 x smartphones = $80
4GB data = $70
22% access discount (on data w/new plans): ($15.40)
Total: $134.60

The new plan is actually better in this instance, because the data is shared, you don't have to worry about using 2.1GB on one device and only 400MB on the other. The real savings comes for people with many devices, say four smartphones w/ the old 1400 minute plan with the base data package:

Hypothetical family of four:
4 x lines on 1400 minute plan w/unlimited texting: $139.96
4 x 2GB data = $120
Total: $259.96

New plan:
4 x smartphones = $120
8 GB of data = $90
Total: $210.00

That's $50/mo cheaper or $600/yr, which is real money by anyone's metric. If they had the old 700 minute plan instead of 1400 minutes they'd still save $360/yr, plus they now have unlimited calling.

Here's what stinks though:
Single person, old plan:
450 minute individual plan w/unlimited texting = $59.99
2 GB of data = $30
Total: $89.99

Single person, new plan:
1 x smartphone = $40
2GB of data = $60
Total: $100

This is part of an industry shift from focusing on ARPU (average revenue per user) to ARPA (average revenue per account), which doesn't make it any easier to swallow if you're a single person, but that's what is driving it.

There's always prepaid for people with a single line of service....

jseymour

join:2009-12-11
Waterford, MI

Re: Huh?

said by Crookshanks:

Single people pay more, families pay the same, or less, depending on usage.

Not really. A year ago, on VZW, I could've gotten a smartphone on a data plan for $80/mo. and added a dumb phone for my wife for $10/mo. I could've had both of us on unlimited data for $120/mo.

Y'all can argue it until you're blue in the face, but even the VZW business rep. I met with earlier this week readily conceded I was right.

Jim
Crookshanks

join:2008-02-04
Binghamton, NY

Re: Huh?

You didn't even read my examples, did you? The new shared plans comparable favorably with the tiered plans that replaced unlimited. They obviously do not comparable favorably with unlimited plans, but those were going away regardless.

As far as your hypothetical:

2 Lines w/700 minutes and unlimited texting: $99.98
1 x 2GB or unlimited data: $30.00

Total: $129.98

New:

1 x Smartphone = $40
1 x Dumbphone = $30
2GB of data = $60

Total: $130

Look, it costs the same. Which is exactly what I pointed out above.

If you were willing to forgo texting entirely (kudos to you, btw, though few people do this) it would have been $30/mo cheaper under the old scheme. Tiered packages would cost $20 to cover both lines, so you'd be saving $10/mo in that instance.

These plans do suck for the people who just want a basic no-frills dumbphone, the stereotypical "I'll use it for emergencies" user. In the old days you could add them for $10. Now it costs $30. In reality you'd just get them a prepaid phone and be done with it. Verizon doesn't want to subsidize a device for this type of person, hence the $30/mo charge.

It sucks, but there are lots of prepaid alternatives, so what's the problem?
wkm001

join:2009-12-14

LTE on Prepaid

I'm really looking forward to prepaid options getting access to 4G LTE. I'll probably have to wait for 5G to come out though.

On the plus side, now that everyone is moving toward 4G, my 3G is much faster. The day Page Plus Cellular gets access to Verizon's 4G, I'll immediately buy a 4G phone. 4G would be nice but it isn't a requirement.

On the rare occasion Pandora plays a song I don't like, I wouldn't have to wait so long for the next song to buffer.
axus

join:2001-06-18
Washington, DC
Reviews:
·Comcast

Fixed price, low bill

I think people want a low bill, at the advertised price, that never changes.

Let's take AT&T for example. They could offer a $50 plan, and provide what they can to still make a profit. Change the voice minutes, text messages, data cap, data speed, to whatever makes sense. But don't stick all these fees or increases on there.

Then Verizon could offer their own $50 plan, and compete on features. Leave out price as an issue, and see who has the better features.

Never happen, but a cell phone customer can dream
ArizonaSteve

join:2004-01-31
Apache Junction, AZ
Reviews:
·voip.ms
·CenturyLink
·T-Mobile US

That Can't Be True!

How can 4G be priced higher than 3G? Isn't it all the same price? I don't even know of anyone that has different prices for them. If a 4G phone can't get 4G shouldn't it fall back to 3G so you'll have service? Ok, the Samsung Exhibit II that Walmart sells can't get 3G but the Galaxy S-II does and will fall back to 3G if 4G is not available.
firedrakes

join:2009-01-29
Arcadia, FL

Re: That Can't Be True!

4g is 3g plus. it really done to using tech so dam propitiate(dont think spelling word right) that the cost to upgrade or replace is very high
elray

join:2000-12-16
Santa Monica, CA

Short Term Effect

So-called "4G" costs more out of the gate, because so many sheep are willing to sign for it as they lust for their latest fashion accessory.

When the carriers need to convert the hold-outs, prices will moderate.
jjeffeory

join:2002-12-04
USA

Re: Short Term Effect

Yup, good point. We're not going to be able to change that one here. It amazes me how effective the marketing has become these past several years though... I mean, we are so driven by upgrading and and having the absolute latest thing. Our country is hooked on listening to the hype more than ever. Kinda sad really.

JohnInSJ
Premium
join:2003-09-22
Aptos, CA
said by elray:

because so many sheep

For those of you playing the home drinking game, down that shot
--
My place : »www.schettino.us
antennaman19

join:2010-01-18
Painesville, OH

Re: Short Term Effect

nice.

Lone Wolf
Retired
Premium
join:2001-12-30
USA
kudos:1
Reviews:
·Verizon Online DSL

Spot On Article

My carrier charges $40 monthly for unlimited, talk, text and data at 3G.

They charge $50 monthly for 4G.

Close enough to 20% for me.

»www.mysimplemobile.com/Simple-Mo···lan.aspx
--
Vote the Ins Out.
One term for all politicians.
Give the government back to the people.

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