Eyes will be on LTE pricing, not speed, when it arrives

While doing research for an upcoming ITWorld reporters' video roundtable on recent news, mobile analyst Chris Kissel of In-Stat threw me this statistic: Every day Verizon Wireless sells 13,000 LTE handsets a day in the U.S. That's an astonishing number.
Of course, there's 10 times as many people there than here, but it might attest to the demand for high-speed wireless — or, at least to the demand for speeds faster than Verizon's pokey third generation (3G) CDMA network. Remember, Verizon jumped from CDMA, where users likely saw average speeds of less than 1 Mbps) to fourth generation (4G) LTE, where, speeds average around 6 Mbps, according to one magazine.
[Background: A CDMA data network tops out at 3.5 megabits per second under ideal conditions. LTE — if all the bells and whistles are turned on, and they aren't on a new network- — should top out at least at 100 Mpbs]
That got me thinking about Rogers Communications Inc.'s new fourth generation (4G)  LTE network in Ottawa, the first in this country. The only way you can take advantage of it is by hooking an LTE-enabled USB modem to a laptop. Handsets are coming soon, Rogers promised, and its LTE service will come in the fall to Toronto, Montreal and Vancouver. BCE Inc.'s Bell Canada will have LTE service in select cities in the fall, with Telus Communications Co. joining early next year.
Will LTE be the roaring success here as it apparently is for Verizon? It will depend on the pricing. Bell and Telus haven't said anything, but Rogers' wireless data pricing has me worried.
It's charging LTE subscribers $45 a month for accessing 1.5 Gigabytes of data, $60 for 3GB and $75 for 6 GB. Subscribers using a USB data modem for laptops on the slower HSPA network — which is at least three times as fast as a CDMA network —  pay $35 a month for 500 MB of data, $40 for 1 GB, $55 for 2 GB and $70 for 5 GB. What LTE subscribers get is unlimited access to social networking sites, so maybe it's a wash in terms of price.
But look at Rogers' data pricing for HSPA smartphones: $45 for 500 MB of data, $60 for 1 GB, $95 for 2 GB and a whopping $130 for 5 GB.
The question is, what will Rogers LTE smartphone data prices be? Subscribers who use wireless data are paying quite a premium — almost twice as much.
By comparision, Verizon has ONE pricing scheme for smartphones and devices using USB modems, 3G or 4G network:US$30 a month for 2 GB, US$50 for $80 for 10GB.
Presumably, Verizon wants to encourage subscribers to shift to its new network. Rogers, meanwhile has a new HSPA network to pay off on top of the fledgling LTE network. It doesn't have to rush subscribers off HSPA, which will last many more years.  And remember this: Its HSPA network now tops out at 21 Mbps under ideal conditions, meaning in the real world subscribers will — for the time being — get data speeds not that far off of LTE.
How will that affect Rogers' thinking on LTE handset data pricing? Or Bell, or Telus, who also have spanking new HSPA networks [and theirs tops out under ideal conditions at 42 Mbps]?
My bet is they'll  want to squeeze the most from subscribers eager to get a new technology.
Remember those Verizon handset sale figures. You won't see anything like that here for a while

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Jim Love, Chief Content Officer, IT World Canada
Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@]

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