APAC LTE plans get more customer-centric

Dianne Northfield/Tolaga Research
15 Nov 2012

With 19 live LTE networks across 7 nations in the Asia Pacific, there are now hundreds of 4G data-only and smartphone services plans available across the region.

According to a new Tolaga report, Asia Pacific: LTE Deployment and Pricing Strategies, there is evidence of more experimentation with 4G service plans and customer centric strategies. This activity is led by plan and pricing innovations in South Korea and Hong Kong.

4G markets are maturing in the Asia Pacific driven by fierce competition and the urgency of 3G capacity offload which is a key challenge for many operators in the region. There is a trend across the region to price 4G services on par with existing 3G services as operators seek to attract their existing 3G customers to 4G. New or late comers to national LTE markets are often seeking to differentiate by offering ‘more for less’ notably in terms of higher data allowances than those offered by competitors. In part driven by the introduction of LTE-compatible smartphones, there has also been a dramatic increase in 4G subscribers in the region, particularly in Japan and South Korea.

Although tiered 4G service plans and pricing models are the norm, operators in the region are testing a range of packaging and pricing strategies. For example, while noting that operators are adopting different device subsidization and bundling approaches in pricing their 4G smartphone plans, there is a wide range of data caps offered and wide variance in service pricing for the same or similar data allowances.

Operators in Hong Kong are offering the lowest smartphone associated data caps between 0.15GB and 0.5GB, which retail in the $20 range. The highest data allowances of 20GB to 25GB are available in South Korea with service plans priced between $100 and $120. When compared on a per GB basis, service prices are significantly higher in Singapore and Australia.

In terms of 4G service innovations, in South Korea, SKT is experimenting with plans targeted to specific age and user groups with different usage patterns and interests. Among its ‘Life Pack’ plans are those targeted to students and seniors which include content specific to these age groups such as educational multimedia content and gaming content for the former, and reduced rates and additional voice minutes for users over 65 years.

South Korean operators, along with operators in Hong Kong, are also starting to aggressively introduce bundled services, tailored content and customized plans associated with ‘basic’ 4G service plans. In both nations there have been changes to 4G service plans post launch, particularly increased data allowances and broader data cap options without a corresponding increase in service price, as operators gain awareness of customer usage patterns.

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