LTE is providing operators with a new lease on life, and not just in terms of being able to offer an improved user experience, a chance to sharpen branding messages and an opportunity to differentiate themselves from rivals.
Operators are also seeing changes in consumer behavior, and initial signs are that LTE users are consuming more data than 3G customers.
This is extremely encouraging news for operators, because it indicates that LTE will deliver on the promise of bringing about an increase in data consumption and therefore spending on data services.
Early adopters are responsible for some of the higher LTE usage that operators are seeing, with members of this group having higher-than-average usage profiles. At the same time, it is the typically greater capabilities, larger screens and faster processors of LTE devices that will help stimulate incremental usage, and not just the faster networks.
Although LTE networks are still young, evidence is emerging that LTE users are consuming more data than 3G users, especially in markets where services have been most aggressively launched:
- NTT DoCoMo in Japan says that 3G smartphone users consume eight times more data a month than users of i-mode handsets, and that LTE smartphone users consume nine times more data than 3G users.
- In the US, MetroPCS subscribers on unlimited LTE data plans use between 2GB and 2.5GB of data a month, not including Wi-Fi or roaming usage. What’s more, about 40% of all MetroPCS gross additions in September were made up of 4G subscribers, and more than 70% of them were taking an unlimited 4G data plan priced at $55. By comparison, MetroPCS’ entry-level LTE price plan starts at $40 for 250MB of 4G data.
- South Korea’s SKT is seeing an almost 50% increase in monthly data usage on LTE compared with 3G, with the respective figures standing at 1.6GB and 1.1GB at end-June. By comparison, Samsung says that average LTE data usage in South Korea is 141% higher than on 3G, with LTE users consuming 2.9GB of data on average a month compared with 1.2GB for users on 3G.
- Vodafone’s LTE usage in Germany, almost all via dongles, is about 11.5-12GB a month, which the operator says is similar to its fixed-line usage. Dongle usage is, of course, a lot higher than smartphone usage, but Vodafone Germany’s experience shows that speed and usage amounts are closely linked.
- Verizon Wireless says that more than 35% of its data traffic is already on its LTE network, and that 95% of its postpaid mobile broadband activations in 3Q12 were for LTE services.
- Hong Kong cellco CSL has reported that LTE users consume two to five times more data than 3G users.