The price of LTE services will drop by 60 per cent over the next five years, according to new research. UK based pricing and tariff services analysis firm, Tariff Consultancy, claims that LTE mobile broadband will lose its premium tag by 2016.

The company collated pricing and product information for LTE mobile broadband services from 30 operators in 16 countries and found that that the average price worldwide for a top of the range LTE Mobile Broadband service is currently around €50 per month ($65), typically based on a post-paid 24 month contract term.

The firm anticipates that LTE mobile broadband pricing will decline as more carriers worldwide adopt the technology. In Europe today, around 60 per cent of the commercial LTE services set to be launched already have been. 2012 will see more LTE networks launched in other regions including the Asia Pacific and South America. Tariff Consultancy argues that LTE pricing is set to become more competitive as LTE becomes a mass market service and enters other consumer segments using increased download access speeds as a key differentiator.

By the end of 2016, the firm forecasts that there will be over 250 million users of LTE mobile broadband services, and the average pricing per subscriber will decrease to around €20 per month, a decrease of 60 per cent in LTE pricing over the five-year period.    

“Although it is clear that LTE subscribers and revenues will grow substantially over the next five years, LTE mobile broadband services will start to adopt the same mass market characteristics of the existing fixed broadband and 3G mobile broadband services with increased speeds but price competition,” said Margrit Sessions, managing director of Tariff Consultancy.

She added that there is already evidence of price erosion from selected LTE broadband providers. Australian operator Telstra currently offers its BigPond USB 4G mobile broadband product with an 8GB monthly data user allowance for the equivalent of €30 per month, against €38 for a 4 GB monthly data user allowance reported at the time of launch. In Singapore, M1 (Mobile One), is offering its LTE- equivalent service to existing customers with a 40 per cent discount off the monthly list price.

“The onus will be on the operators to bundle other services into their LTE offer and develop more compelling user-based applications and content services as well as simply providing large LTE Mobile Broadband access capacity,” concluded Sessions.