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Consumers buying 4G LTE devices but not 4G data plans
AFP
January 07, 2013
First Published: 18:19 IST(7/1/2013)
Last Updated: 18:24 IST(7/1/2013)

Over 100 million 4G LTE smartphones and tablets shipped over 2012 but consumers are not upgrading their wireless carrier contracts to take advantage of ultra-fast mobile internet.


According to a report from ABI Research, when 3G handsets launched around the world in 2003 and 2004, each handset sale correlated with a subscription upgrade from 2G to 3G, however the same cannot be said of 4G LTE. "That is not happening with every LTE handset sale," said Jake Saunders, VP Forecasting at ABI Research. "But carriers should not be panicking -- it is seeding the market with 4G handsets. A number of purchasers are simply coveting their favorite 'Brand' and/or carrying out a much needed update to one of their key fashion accessories."

ABI estimates that in total 103 million 4G devices shipped in 2012, including 3.35 million tablets and 6 million LTE USB Dongles, with the majority of those devices finding their way to the North American and Asia Pacific markets where the 4G network is already firmly established.

There is no question 4G LTE offers an improvement in mobile internet performance over 3G, however data plans, particularly in the US, have come under criticism for their relatively high monthly costs and are clearly one factor in many consumers' unwillingness to change their data plans in line with their upgraded handsets.

A survey published by the GSM Association in October claimed that despite being the world leader in 4G LTE uptake, US consumers were paying on average three times more per gigabyte of downloaded data ($7.50) than the average European ($2.50).

ABI's own research on the subject, also published in October, revealed that around the world, 4G data plans were on average 20 percent more expensive than the equivalent 3G plan.

However, ABI believes that prices will come down as more users sign up to data plans and as network carriers develop new charging models that will help them spread network costs. "New sign-ups and conversion of 3G subscribers with LTE-capable handsets should gather pace in 2013 and 2014. By 2017 we are anticipating 785 LTE million subscribers, up from 58 million at the end of 2012," said Phil Solis, ABI Research Director.


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