U.S. customers pay more for LTE data, report says
LTE data is pricier in the United States than in Europe, according to a recent report from London-based GSM Association subsidiary Wireless Intelligence, but increased competition could drive prices down.
On average, Europeans pay about $2.50 for 1GB of data downloaded on an LTE, or Long Term Evolution network, according to Wireless Intelligence.
In contrast, Verizon Wireless charges $7.50 per gigabyte (GB) in an unlimited shared data plan and $5.50 per gigabyte in a regular, data-only plan, a Verizon spokeswoman told the New York Times .
Different plans, different prices
European carriers have largely phased out unlimited data plans in favor of plans that let subscribers buy monthly gigabyte allowances and pick a broadband speed. For instance, you can buy 10GB of data at LTE speeds of around 80 megabits per second (mbps) for $44 or an unlimited LTE plan for $80.
There are no comparable plans in the U.S., which is why no direct comparisons between plans can be made on a global scale, according to Wireless Intelligence. Some carriers, like Portugal’s Vodafone and TMN, sell six different speed-based data plans.
4G LTE is fast becoming the new standard for wireless carriers, and its speeds are around ten times faster on average than those pumped out by older 2G and 3G networks. Because many carriers have yet to fully build out their LTE network infrastructure, the service may not yet be available in your city or neighborhood.
The United States is home to more than half of the world’s LTE subscribers, but until recently just two major US carriers, Verizon Wireless and AT&T Mobility, offered the faster LTE service.
Verizon was the first American company to offer LTE (December 2010), one year after the very first LTE service was launched in Sweden. AT&T and Sprint followed with their own LTE plans, and T-Mobile has said it will launch its own service in 2013.
The introduction of the iPhone 5, which now supports LTE, is expected to make the service more popular, and data cheaper.
LTE vs. 3G
LTE data isn't inherently more expensive than data on slower data connections such as 3G, but carriers' new tiered data plans do cost more. AT&T and Verizon have phased out unlimited data plans (for all but customers that are grandfathered in on older plans), so subscribers pay more for each escalating tier of data. Sprint remains the only major US carrier to offer unlimited data.
“There’s no difference between the plans for 3G and 4G,” says mobile consultant and adviser Mark Lowenstein, managing director of Mobile Ecosystem. “The economics of LTE, particularly when it’s fully built out and the network starts carrying more traffic, are more favorable because it costs the carrier less to deliver 1GB of data to subscribers."
"I think that will be a factor over time and contribute to lower data prices. It’s likelier that data prices go down than they go up,” Lowenstein says.
Verizon Wireless in June had nearly 11 million LTE subscribers, with 4G network coverage of 245 million people. AT&T Mobility as of June had 750,000 LTE customers. Those numbers don’t include adopters of the latest iPhone, which could push the number of LTE customers up sharply.