The United States has emerged as the largest LTE market in the world, but it's also the most expensive, according to a report from the GSMA.
According to the New York Times, which first noted the report, prices in the U.S. for LTE on a per gigabyte basis are significantly higher than in other early LTE markets. The report, from GSMA unit Wireless Intelligence, found that Verizon charges $7.50 per GB on its LTE network, compared to the European average of $2.50 per GB and the average in Sweden of 63 cents per GB of LTE data.
Verizon spokeswoman Brenda Raney noted to the NYT that the $7.50 per GB price ratio is for Verizon's Share Everything plans that include unlimited voice and messaging (and the ratio is derived from the highest possible usage tier: 20 GB for $150 per month). She said that if customers bought a data-only plan they would pay $5.50 per GB, still higher than the European average.
AT&T Mobility's (NYSE:T) shared data plans, which are option for new or existing customers, offer higher prices per GB than Verizon's do, topping out at $10 per GB of shared data ($200 per month for 20 GB of shared data). AT&T also offers data plans for individual customers and charges $20 per month for 300 MB, $30 for 3 GB and $50 per 5 GB.
Sprint Nextel (NYSE:S), which launched LTE service this summer, offers unlimited smartphone data for its LTE phones, with plans starting at $79.99 per month. However, Sprint has usage-based plans for its data-only LTE devices, and charges $6.67 per GB for its highest-tier data plan (12 GB for $80 per month).
Calum Dewar, the Wireless Intelligence analyst who made the comparison, proposed a few reasons why U.S. consumers were paying more for LTE, according to the NYT. He said many U.S. carriers sell LTE data as part of a larger package of services whereas European operators often sell standalone data-packages. The rise of usage-based pricing in the U.S. market also drives up costs. Europe also has the greatest share of LTE carriers--38 of 88 worldwide--leading to more competition on price, Dewar said.
The U.S. carriers counter that they have more than half of all LTE subscribers worldwide--most held by Verizon--and that the cost of covering the U.S. market with LTE is higher than in many European countries.
For more:
- see this NYT article
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Article updated Oct. 22 to reflect that Calum Dewar of Wireless Intelligence did not attribute one cause of lower LTE data pricing in Europe to the use of prepaid LTE data by MVNOs.