Pricing schemes key in LTE future

Martin Morgan/Openet
12 Sep 2011

As a new service LTE presents operators a chance to move to new innovative pricing and packaging models at the onset. But early movers in Asia-Pacific have so far displayed only some innovation.

So far, six operators have launched LTE services in the region. Korea’s KT and LG U+ provide usage based plans with a data cap. NTT DoCoMo in Japan has launched usage based plans with the ability to buy more data when caps are exceeded.

In Hong Kong, CSL has usage based tiers, but their most expensive plan is unlimited. Also, Singapore’s M1 has launched its LTE service to business customers and has offered it based on unlimited use. In the Philippines, Smart is providing LTE service and demonstrations only on a limited basis on the holiday island of Boracay.

According to the GSA in Asia Pacific, there are 36 more operators who have made commitments to launch LTE services and another nine who are running LTE network trials.

LTE presents a significant opportunity to develop new pricing and packaging models. What customers will pay for, the amount they will pay, how they will pay and how much operators should charge for a service in order to ensure profitability – these are all important questions for determining effective pricing models.

According to recent research from Telesperience, price is not the most decisive factor when consumers select a mobile operator -- value is more important. Once operators embrace the concept that value is more important to customers than the lowest price, they will no longer need to commoditize their services and get involved in a downward price spiral.

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