Tablets Disproportionately Drive Long Term Evolution Demand

By Gary Kim November 26, 2013

Service provider pricing policies matter. Use of mobile networks for tablet access provide one example. At least in some markets, tablets are driving a disproportionate share of fourth generation Long Term Evolution services, for example.

Western Europe provides one example. In Western Europe, operators made early efforts to use mobile broadband as a substitute for fixed broadband by offering competitive tariffs for dongles, according to Ericsson.

Price promotion is one reason for that exception to the trend that it generally is smart phones that are driving LTE connections and data consumption.

According to GSMA research, smart phones account for 58 percent of 4G operator device portfolios, but only about 17 percent use 4G connections (3G still is the mainstay).

But 33 percent of the data devices offered by mobile service providers (dongles, tablets or hot spots) were 4G-enabled. In other words, users of data devices are twice as likely to buy 4G service, compared to smart phone users.

That appears to be a combination of supplier push and end user demand.  

At Verizon Wireless, for example, all data devices support 4G. In the fourth quarter of 2012, about 17 percent of all devices sold was a data device, according to GSMA Intelligence.

Given the confluence of demand and supply (consumers rapidly are adopting tablets and tablets benefit from data connections), mobile operators increasingly are emphasizing tablet connections and device sales.

On average, the 4G operators surveyed offered seven tablets in their data devices portfolio. Operators such as A1 Telekom (Austria), Polkomtel (Poland), MTS (Russia), STC (Saudi Arabia) and Telenor (Sweden) were found to be offering twice the number of tablets they were a year ago.

One reason is that selling tablets is a proven way to boost purchases of 4G LTE services.

LTE users consume 1.5 GB of data per month on average, almost twice the average amount consumed by non-LTE users, according to GSMA.

In developing economies, LTE users can generate average revenue per user seven to 20 times greater than non-LTE users.

In developed markets, operators have found that LTE can generate average revenue per user increases of 10 percent to 40 percent.

Edited by Cassandra Tucker

Contributing Editor

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