What is 4G, seriously?

Jouko Ahvenainen/Grow VC Group
12 Nov 2013

You see 4G ads in all carriers’ windows nowadays. Consumers have expectations about 4G, when he or she buys a new phone or subscription. Does the consumer really know what they’ll get? What should they expect? 4G is a nice marketing statement now, but is it good that consumers cannot really know what they actually get? And carriers can lose money with poor productization.

I have studied radio technology, digital signal processing and worked with mobile devices for years. I have a 4G phone and subscription that typically gives me 5 to 7 Mbps downlink speed. And I have another 4G phone and subscription that typically gives me 50 to 60 Mbps downlink speed. A sales person at a carrier store said to me “there is huge difference between 3G and 4G”, but my friend has a 3G only phone, and he gets better speed than my other 4G phone. I’m confused.

The problem is 4G is not an easy concept to communicate to consumers. We have LTE, Mobile Wimax and TD-LTE. We have early versions and more advanced versions of each track. The actual speed depends on the coverage, location and network load. Regardless, consumers would like to better know what they are really getting when they buy a subscription and phone.

Home broadband connections are mainly sold based on the bitrate: 2 Mbps, 10 Mbps or 50 Mbps. We can say that it is more difficult to guarantee the bitrate with mobile phones, when a user uses it in different places. Could it nevertheless be clearer to start to speak also about real speeds to mobile subscribers instead of bandying around the term 4G?

Smartphones are an important part of people’s lives nowadays. It is maybe the most important personal device. People want to carefully consider which device and subscription they take. And normally they are tied to their selection for at least two years. It can be a huge disappointment if the actual product is very different from their expectations, or their friends or colleagues have much better service. Would it be better to transition to more fact-based marketing and sales with 4G in order to manage consumers' expectations?

My recommendation to carriers is to re-think 4G marketing and productization. It is probably clearer to speak about real speeds, e.g. about realistic top speed and average speed. It also opens new opportunities to productize subscriptions based on the speed, e.g. subscription with max 10 Mbps speed and max 50Mbps speed. It is not guaranteed speed (and it is neither guaranteed in the landline broadband), but it gives realistic guidelines to people about what they really get. And carriers can also offer higher speeds with a higher price (see also The future of carriers' revenue), and get people to pay based on their real needs.

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