According to ABI Research, 4G tariffs have declined significantly on account of aggressive deployment of long term evolution (LTE) networks and growing availability of LTE-enabled smartphones.
As per the research firm, the first quarter of 2014 indicates that in a large number of markets, 4G tariff plans comprise more than 55 per cent of the lower tariff plans as compared to just 22 per cent a year ago. Also, currently, 4G tariff plans are marginally priced higher than the 3G tariff plans. In 2013, the 4G data pricing was about 20 per cent higher than 3G for the equivalent data plan. Intense competition is driving operators to lower 4G tariffs.
ABI Research points out that to encourage adoption of 4G, operators are providing these services at affordable prices. For example, Bharti Airtel has introduced new tariff plans for subscribers, offering 4G services at 3G data prices through their mobile phones.
According to the research firm, 4G customers spend more time and money on data services as compared to 2G and 3G users. By offering lower 4G prices, operators are looking to migrate their 2G and 3G users to 4G. However, ABI Research suggests that operators should focus on increasing average revenue per user (ARPU) from 4G users with higher data usage instead of lowering the base price for the service.
The research firm suggests that operators could explore the option of boosting their ARPUs by offering LTE multi-device shared plans to consumers. In many markets, in-country voice dialling and text messaging have become heavily commoditised. Operators, such as Vodafone, T-Mobile, and Telefonica, offer unlimited text and voice for their mid and high tier data quota plans. At present, multiple tiered data tariff plans represent 46.7 per cent of all tariff plans. Further, Multi-device shared plans have started gaining traction in the market as they now represent 8.3 per cent of tariff plans, witnessing a quarter on quarter growth of 38 per cent.
