Three quarters of countries offering 4G services have dropped their tariff prices in the last six months
4G tariffs have dropped by almost one third globally according to the latest research, as mobile operators fail to take advantage of 4G's capacity to boost revenues.
Altogether, 73% of countries with 4G services have dropped their 4G tariffs by an average of 30% in the past six months, says ABI Research.
'ABI Research is concerned that a number of operators have introduced 4G pricing plans at the same, or even lower, price points than 3G,' stated Jake Saunders, vice president for forecasting at ABI.
'In Norway, Telenor has introduced 4G tariffs that are cheaper than 3G. 4G is more spectrally efficient and can handle a lot of data but it's important carriers take advantage of 4G to boost service revenues,' warned Saunders.
One way carriers can use 4G to increase revenues is through 'multi-device plans' such as Verizon's 'Share Everything Plans', which have helped to contribute to a net increase of 2.2 million subscribers in the fourth quarter 2012 for the operator, and boost in part service revenues by 8.52%, to $16,393 million.
'India currently offers the lowest priced plan in ABI Research fourth quarter 2012 survey. India's lowest priced mobile data plans decreased 29.4% year on year compared to the fourth quarter 2011, when it ranked fourth,' said Marina Lu, research associate at ABI Research.
According to the survey, United Arab Emirates currently has the most expensive mobile internet pricing plan, at $67.8 for 5GB. There is considerable fluidity in mobile data tariffs, noted ABI; one year ago, Singapore had the cheapest mobile internet tariffs, but it has since reduced its data caps while keeping the tariff pricing the same.
Comparing mobile internet pricing between the second quarter 2012 and the fourth quarter, 73% of countries have reduced the effective cost of their 4G tariffs to a significant degree. The effective cost, or the dollar per gigabyte basis, has dropped by 30%.
In US, most of the carriers took the route of keeping fees the same but have introduced larger data quotas to attract users. In Australia, Sweden, Japan, and Saudi Arabia, operators lowered the monthly fee but have kept data quotas unchanged.
Smart Chimps thinks: So, is this mass price dropping exercise indicative of mobile operators panicking after slow starts in the user sign up for 4G? It certainly sounds like it. Smart Chimps wonders if this price cutting will continue further, or if 4G tariffs will end up heavily loaded with data and gadgets to keep users enticed. Are mobile operators actually cutting off noses to spite faces? Should they just bide their time and wait for momentum and desire to grow for 4G? An interesting area to keep an eye on, we think.