4G LTE Internet services costs too much, can come down

More people would buy 4G LTE if the price was lower, which we know is possible because it is 2 to 10 times lower in Europe. And then a lot more people around here would have fast Internet service.

Kevin J. O’Brien wrote for the NYTimes 15 October 2012, Americans Paying More for LTE Service

Vodafone LTE A comparison by Wireless Intelligence, a unit of the GSM Association, suggests that being in the biggest LTE market has not brought low prices to U.S. consumers.

According to the study, Verizon Wireless, which is a joint venture of Verizon and Vodafone, charges $7.50 for each gigabyte of data downloaded over its LTE network. That is three times the European average of $2.50 and more than 10 times what consumers pay in Sweden, where a gigabyte costs as little as 63 cents.

Standard business practice: sell a new service for as much as the market will bear, and come down in price over time. Except in the U.S. there isn’t much of a market, with only 2 or 3 wireless carriers offering 4G LTE, as the article notes:

But another big reason for the trans-Atlantic discrepancy in LTE costs, Mr. Dewar said, is a difference in the levels of competition. Europe has the greatest number of operators selling LTE: 38 of 88 operators worldwide. Even small markets like Austria, Finland and Portugal have three LTE operators.

I like the speeds (more than 20 times the upload speed of AT&T’s DSL). I’m not so fond of the price: $80 for 10 gigabytes per month, and $10/gigabyte over that.

Brenda Raney, a spokeswoman for Verizon Wireless, which is based in Basking Ridge, New Jersey, said the Verizon Wireless LTE plan cited in the study also included unlimited voice minutes, unlimited text, picture and video messages shared among 10 different data-capable devices and a mobile hotspot on the smartphone. Having a data-only plan, Ms. Raney said, would reduce the per-gigabyte charge at Verizon Wireless to $5.50 — still be more than twice the European average.

Verizon HomeFusion I have a data-only plan, and $80/10GB is $8/gigabyte, not $5.50. Now Verizon does offer in other states, such as Tennessee, a HomeFusion Broadband 4G LTE service with better rates:

  • $6.00/GB = $60 for 10GB
  • $4.50/GB = $90 for 20GB
  • $4.00/GB = $120 for 30GB

You have to commit to more per month to get those lower prices per gigabyte, and that would also be an impediment to many people around here buying that service.

So far, all I’ve gotten Verizon to say about that service in Georgia is new states usually follow a few months after neighboring states. We’ll see.

Hm, maybe a surge of interest in the better-priced service might lead to VZ selling it here? Maybe with better prices?

-jsq