Press release
InfoCom says mobile operators banks on LTE to support the explosion of mobile data traffic worldwide.
Volume-based pricing increases consumers’ awareness of their data usage habits
NTT Docomo, TeliaSonera and Verizon Wireless rallied to pioneer the commercial launch of LTE service in Asia, Europe and North America, respectively, rolling out LTE networks already during 2010. These operators primarily targeted urban areas utilizing 2.6 GHz spectrum for their pilot trials. TeliaSonera had started to roll out its LTE network actually already in 2009 in the key cities of Norway and Sweden. The operator extended the reach of its LTE services, launching commercial operations in Estonia, Denmark and Finland in 2010. NTT Docomo and Verizon Wireless launched their LTE service in 2010, tapping the key urban areas in Japan and the US.
All mobile carriers have pushed a strategy of discounts for their initial LTE offering, with bundled device and services such as mobile TV and music streaming. Verizon Wireless offers the largest range of LTE-capable devices — among which are 2 USB modems, a smartphone (HTC Thunderbolt) and a tablet PC (Motorola Xoom) — and plans to expand its current portfolio with the release of 8 additional ones by mid-2011. NTT Docomo and TeliaSonera primarily offered LTE-enabled dongles for the initial launch of their LTE services; however, both operators are planning to expand their portfolio of LTE-capable devices this year.
In terms of pricing strategy, operators opted to take the pay-for-what-you-use (volume-based) approach to optimise network capacity, guarantee service quality and ensure the equitable distribution of data consumption. The prices of LTE packages are based on the data and speed cap determined by each operator, with additional charge for excess usage. The volume-based approach zooms in to heavy-data users, supporting the growth in the demand for mobile entertainment services such as mobile TV, gaming and music streaming. LTE is expected to support the consumption of mobile data increases and as well as new services such as Voice-over-LTE (VoLTE). LTE is currently marketed as a complimentary service for 3G, with minimal price difference between the two services. Mobile carriers move away from the popular all-you-can-eat (flat rate) pricing towards pay-for-what-you-use (volume-based) model in order to optimise network capacity, guarantee service quality and ensure the equitable distribution of data consumption. TeliaSonera and NTT Docomo offer LTE as a postpaid service, with initial price discounts for existing subscribers; while Verizon is exploring the potential of offering prepaid data-only plan, although currently offers price rebates for clients with a 2-year LTE contract.
About Innovations Spotlight: This extract in based on InfoCom Innovations Spotlights topic-focused papers on the impact of new technologies and new market changes in the telecoms, IT and media industries. The analysis displays InfoCom’s unique expertise as of monitoring and evaluating innovations for these industries. With 12 issues a year, users are best informed about compelling themes, which could impact their markets. If you wish to know more about Innovations Spotlights, do not hesitate to contact us. Talk to us. We listen.
About InfoCom: InfoCom is a market research and consultancy company with over 20 years experience providing strategic analyses and planning assistance to stakeholders in the telecommunications, IT and multimedia industries. InfoCom’s independent and fact-based analyses highlight trends and opportunities, supporting decision makers to understand market dynamics in order to improve their competitive advantage.
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