As featured on TM Forum's "The Insider Blog"
We all know the reasons mobile operators are rushing to roll out LTE 4G service, but there may be no real reason for customers to take it up in the short term. Yes, it's fast, but so is HSPA+ 3G with many operators reaching speeds of 21-72Mbps. Oh, and there are a lot more devices around for those 3G networks - all the top sellers are 3G enabled smartphones.
In fact, the current 3G experience is so good that, according to a Connected Consumer survey by Analysys Mason, 46%of iPhone 4 users think they already have 4G service and more than 6%of mobile users believe that they already have a 4G handset. People in the industry, so accustomed to the terminology, may be missing why it is all so confusing to customers.
For a start, the ‘4’ in an iPhone 4 or 4S may be causing some confusion. Stop laughing, it's true! How many Wimax providers are touting their unique '4G' services and how many sales staff are hinting that their 3G services are as fast as 4G. The terms LTE and Long Term Evolution mean nothing to the uninitiated. Why didn't we just call it NFT, for Next Fastest Technology.
Analysys Mason suggests that CSP need to focus their marketing on the differentiating factors of the new access technology from an enablement point of view, rather than solely from a technical one. Yeah, that should work. 'Access Technology' and 'enablement' are really easy terms for Joe Bloggs to understand, surely?
The suggestion that LTE enables consumers to use mobile data services with a much higher degree of reliability than previous-generation data networks – particularly deeper into buildings and while on the move – and at higher data rates is also very questionable. Just ask CSL in Hong Kong why they have had to integrate their existing DC HSPA+ network with the super-duper, state-of-the-art LTE number, and source mobile devices that can handle both networks and seamless handoff between the two technologies.
Sure, latency will be vastly improved on LTE 4G networks, but do customers even know what that is? And what happens when they roam and discover that their home operator’s spectrum range is not supported in the country they are visiting? Do we really expect LTE handsets to include up to ten different spectrum ranges just to match the functionality we now have in 3G roaming? No doubt Qualcomm hopes so.
Maybe, just maybe, SingTel has the right idea to avoid any confusion in the market. Their plan is to simply charge more for LTE service, that way customers will surely understand it is better and faster. In fact, the new service will cost S$69.90 per month ($53.50), more than double the carrier’s S$29.90 charge for its basic 3G 3.6Mbps plan. 4G coverage is currently limited to selected high-traffic areas across the island, particularly in central Singapore.
CSL also started off believing that its 4G service would be sold as a premium product but its dependence on fall-back to the existing HSPA+ network in many congested and high building density areas simply did not justify premium pricing. In fact, they were keen to move existing customers over t the far more efficient LTE network.
If any operator hopes to double tariff rates for 4G services then it pretty much has to guarantee consistently high speeds, exclusively on the 4G network. If it cannot, it will create a far-from-satisfactory customer experience, and in today's market, that is definitely not a good thing.
Surely, marketing departments will need to be reeled in and asked to project honesty with regard to 4G services and pricing will need to be realistically positioned so that customers clearly understand what they are getting. Simplicity would be a most desirable trait to develop at this point, but they may a little too much to ask for.