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Global LTE Usage Depends on the Region

January 22, 2014

By Ernest Worthman…

LTE usage is picking up speed in some places but not others and the mobile data reports point out some interesting discrepancies.

For example, in South Korea, today, one out of every two mobile subscribers now has an LTE device, according to a report from GSMA Intelligence. However, there is an interesting anomaly in this data. As it turns out, only 4G phones are showing an uptick in data usage. In this same report, Korean 4G users have doubled the data usage but 3G data users remain static. This is an interesting statistic. South Korea has 100 percent of its population is under the 4G umbrella. So, why is 3G data flat and not decreasing?

The answer may surprise you. 3G data services do not have nearly the data speed and efficiency of 4G and LTE. 4G is much better at steaming video and other high-bandwidth applications, for example, than 3G. 4G also integrates the latest compression technologies which are much more data friendly and bandwidth efficient, which translates into a much more satisfying customer experience when it comes to data. Some analyst think that the still cumbersome issue of not having seamless, ubiquitous Wi-Fi roaming and slower 3G data rates has 4G users opting for the simpler and seamless data roaming on the 4G network. Similar results are being seen in other countries as well.

That makes sense, but there are some glitches. For example, the U.K and some other European countries aren’t seeing the data rate skyrocket on with 4G devices on their LTE networks. No one is quite sure why, but there seems to be a correlation between data plans and price points. Not every country is in free fall with data plan rates and it seems that some users are choosing to put up with older data plans and some of their short comings to keep the costs down.

But there is traction. In more established markets, LTE operators are starting to reduce the price for existing LTE services to jump start the transition, and start to recover costs. France is leading the charge by pricing its LTE services at the same level as 3G data. Additionally a number of operators, worldwide, have introduced selective price discounts or bundles as part of a LTE promotion.

Examples of LTE promotions include: Paraguay – a 50 percent price reduction in LTE tariffs; Telefonica (Germany) – a 40 percent price reduction for entry level pricing (for the first 12 months of a 24 month contract term); Telekom (Germany) – a discount off the monthly fee plus a three month free period for the music streaming option; Vodafone (UK) – an option to subscribe to either Spotify Premium or Sky Sports Mobile with a 4G contract, with a free period ranging from six months up to 24 months (depending on the 4G package subscription).

The Q4-13 Global LTE Pricing Tariff Tracker also segments LTE pricing (for Post Pay LTE for PC or laptop connectivity) into six main geographical regions around the world. It finds that average LTE pricing in the EU is now USD $34.89 per month (with an average monthly data allowance of almost 20 GB) and is the lowest of the six regions surveyed by TCL.

Pricing for LTE services continues to develop rapidly. And operators are now experimenting with the bundling of additional content (e.g. music or mobile TV) with LTE 4G services in order to attract new users as an alternative to price discounting into 2014.

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