MNOs innovate on 4G pricing

As LTE markets mature, many operators that have launched services are adjusting their commercial rate plans. Greater innovation in LTE pricing and packaging is occurring as MNOs gain more understanding of market demand and usage patterns, and as a result of competition. Operators are also refining their service offers as they augment their LTE networks with newly deployment spectrum resources and as 4G compatible device portfolios expand.
Discernible pricing trends include new promotions and discount offers, increases in advertised service speeds, the introduction of shared plans and the expansion of rate plan offers to cater for different user segments. This article reviews pricing plan adjustments at five LTE operators around the world.
Speed and data allowances
EE is seeking to exploit its first-mover advantage in the UK. Since launching its LTE service in October 2012, it has made a number of adjustments to its LTE plans. For example, last November EE upped the data usage caps on its mobile broadband plans without a corresponding increase in prices. Its 2GB capped plans increased to 3GB, 3GB plans grew to 5GB and existing 5GB plans increased to an 8GB allowance.
EE has also introduced a lower 1GB MBB plan. EE's smartphone plans are based on 12- and 24-month contracts with data allowances ranging from 500MB per month to 20GB. The 20GB plan was introduced in January. Prior to this EE's highest smartphone plan offered 8GB of data a month.
In July EE announced a number of new service plans and features including:
  • A doubling of service downlink speed of between 24 and 30 Mbps available for no additional cost for existing customers (EE launched its LTE service advertising a downlink speed range of 8 to 12 Mbps).
  • The introduction of shared service plans allowing up to five devices under a single data plan.
  • A 30-day pay-as-you-go SIM plan with a 2GB data cap.
When Omantel, operating as Ooredoo, launched its LTE service in July 2012, it did so using TDD spectrum in the 2.3-GHz range. It initially offered MBB only service plans with USB devices. With regulatory permission to refarm its 1800-MHz FDD spectrum holdings in December 2012, Omantel was now in a position to introduce 4G LTE Smartphones and plans.
The operator announced price reductions in July for a range of its smartphones targeted to different user requirements. The Huawei Ascend P1 now retails for RO99 ($257) while the Nokia Lumina 820 is offered for RO120 ($311). On the higher end, customers can purchase the Nokia Lumina 920 and the Samsung Galaxy SIII for RO180 ($468). These prices compare with the Samsung Galaxy S4 introduced in May 2013 at a retail price of RO290 ($753).
150-Mbps service
SingTel launched commercial MBB LTE services in December 2011. Its data-only offering was augmented with smartphone plans in June 2012, followed by a tablet option introduced in August 2012.
SingTel's original 10GB USB plan was priced at S$69.90 ($55), which was subsequently reduced to S$59.90, then again to S$49.90. The service was advertised with a peak download speed of 75 Mbps with expected speeds of 3.4 to 12 Mbps.
The operator announced in May a 150-Mbps (typical range 5 to 40 Mbps) with a 5GB data allowance, retailing for S$59.90 ($47) a month. Following closely in SingTel's footsteps, Hong Kong's CSL also announced a 150-Mbps service offered with a mobile hotspot device. 
The Netherland's KPN initially launched LTE service for only its business customers in May 2012. Commercial services across smartphones and MBB devices were rolled out to consumers in February. KPN's initial smartphone plans carried both a monthly service fee and equipment rental charge.
KPN announced changes in July to its pricing and packaging strategy, which included the removal of handset leasing fees. Its new service plans are priced by both monthly data allowances and the device type, which KPN classifies as basic, standard and luxury.
While KPN launched consumer services with a very limited number of plans, it now boasts 15 smartphone plans. At the basic level, with a basic handset, users receive 100 free talk and text minutes along with 100MB of data and service speed of 2 Mbps. This service is priced at EUR29 ($37). At the upper-end of the scale 4GB of data comes with service downlink speed of 50 Mbps. With a luxury phone this service costs EUR75 ($96) a month.
Huge data allowances
Paraguay's VOX launched its USB-based LTE service in December 2012 when it offered two service plans with 8 and 16GB data allowances. It has subsequently released eight new MBB plans with data allowances ranging from 16 to 2000GB. These plans are priced between PYG155,000 ($34) and PYG650,000 ($143).
VOX's plan prices also undercut those of its rival Personal (Nucleo), which launched its LTE service in February. Personal has three service plans Ð 12GB for PYG159,000 ($35), 20GB for PYG189,000 ($41) and 30GB for PYG249,000 ($55). VOX's 30GB plan costs PYG190,000 ($42). Neither operator has launched smartphone plans to date.
Initial LTE pricing was primarily driven by competition at the service provider level as opposed to market demand. These examples of LTE pricing adjustments and the extension of service offerings targeted to different users and usage requirements show that LTE operators are moving to more innovative pricing and packaging models.
While tiered service plans associated with different data allowance continue to dominate in LTE markets, a notable recent trend relates to differentiated pricing associated with different advertised service speeds, an approach that hitherto has largely only been adopted in Europe. Operators are also becoming more adventurous in the price positioning of their LTE devices along with different service plans.
For more information contact Phil Marshall at [email protected] or go to
This article was originally published in Telecom Asia’s LTE Insights e-report. It is a sidebar of the LTE Insights cover story – 4G data for the masses.