LTE pricing: still huge disparities across the OECD despite increasingly uniform coverage and user experience

• How much difference does the number of mobile operators make to the prices paid by users in each European country?
• Quite a bit.

In the wake of the blocking of the O2/3 merger in the UK by the European Commission on the basis that a ‘four to three’ consolidation would reduce competition and push up prices, Finnish consultancy Rewheel has rolled out some comparisons of European and OECD mobile pricing to illustrate both the huge pricing disparities between one part of the European Union and another, and the apparent relationship those prices have to the number of network operators in each territory.

To misquote George Orwell, it appears to be a case of 4 operators good, 3 operators bad.

First that disparity. The numbers come from Rewheel’s Digital Fuel Monitor service which tracks prices and analyses the competitiveness of countries in relation to usage caps, adoption, consumption patterns and, of course, prices.  Naturally the obfuscatory nature of your typical mobile operator’s price list makes this ever so slightly difficult, but Rewheel has fastened on what appears to be a good measure to get an overall national score. For 4G/LTE services it’s measured the number of gigabytes €35 will buy a user in each territory over a month to come up with a simple ranking (see above).

The sheer range of prices is staggering. At one end of the scale we have Finland (Rewheel’s home country) where the mobile-mad Finns have fostered a competitive environment where €35 can buy you an unlimited amount of data.  

No other country gets close to this although there are a handful of outliers comprising France (once one of the least competitive countries) at 50 Gig, Denmark at 40 and Estonia (just across the water from Finland which may have a bearing) at 30 Gig. A gaggle of  European countries enjoy a twenty something Gig allowance for €35, and then it’s all downhill from there. The US, the supposed LTE leader, languishes near the bottom with the equivalent of €35 buying just 2 Gig a month.

Someone (in Germany, perhaps) needs to ask Vodafone why its customers pay €35 for just 1 Gig in Germany, but the same money buys their English friends €20 Gig in the UK.

When it comes to the 3 operator / 4 operator divide, Rewheel found that operators in 4-MNO (Mobile Network Operator) markets in the European 28 sell 3 times more 4G gigabyte volume allowance for €35 than operators in 3-MNO markets.  Mobile data challenger operators (“disruptors”) that belong to mobile-only or mobile-centric groups sell 8 times more 4G gigabyte volume allowance for €35 than EU28 operators that belong to groups that have fixed-line broadband interests.

A specific recent example of 4 operator price lowering happened in the Netherlands, where a 4th mobile network operator, Tele2 launched a 4G LTE only network only late last year -  prices have now dropped and gigabyte volume allowances have gone up: before, in the 3-MNO market consumers could buy 12 gigabytes for €35. Now, with the entry of a 4th mobile network operator €35 buys double that.

Says Rewheel’s Pal Zarandy: “While by late 2015 LTE coverage has grown and user experience improved to broadly similar levels across developed countries – meaning 5, 10 let alone 100 megabits per second provides seamless, fixed-broadband-like, 4G experience for most consumers – Digital Fuel Monitor shows that huge price and usage cap disparities continue to exist across EU and OECD markets.”