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Speed tiering for mobile data – 5G is driving a new way to differentiate

by Josie Sephton | Jun 14, 2021

Using data from the OECD Mobile Voice and Data Price Benchmarking service, we have seen a continual roll-out of 5G services. Based on the top two operators in each of the 37 OECD member states, 5G plans have been observed from the following operators:

 

While it is good to see the rapid rollout of 5G services across the OECD (and beyond), a closer look at the pricing shows that operators are increasingly differentiating these services both at the 5G level and from 3G/4G/4.5G services and encourage higher spend through headline speeds. Examples of this include:

  • Slower speeds for shorter term contracts
  • Slower speeds on sub-brands versus main operator brands
  • Slower speeds for prepaid vs postpaid plans

Below are selected examples of operators that have introduced speed tiering.

A1 Telekom Austria is offering 3 5G plans - A1 5G iga Mobil L, Mobile M and Mobil S. The S plan comes with 30GB data nationally, plus an additional 10GB for EU roaming, as well as streaming on multiple platforms for music, video, social and chat on multiple platforms without consuming any data e.g. Apple Music, Deezer, Spotify, Netflix, Amazon Prime. Download and upload speeds for this option are 100 Mbps and 50 Mbps, respectively. Both the M and the L plans offer unlimited data, with the main differentiator between the M and L plan being speed (plus the L plan comes with 15 GB more roaming data than the M plan, plus extra roaming minutes and SMSs). For the M plan, download/upload speeds are 150 Mpbs/50 Mbps while for L it is 300 Mbps/50 Mbps.

 

O2 Czech Republic does not offer 5G service as yet but has introduced speed tiering on its Neo range of 4G plans, as can be seen in the illustration below.

O2 Germany offers speed tiering on its Free Unlimited plans, with speeds from 2 Mbps to 500 Mbps, and the cost of the 500 Mbps double that of the lowest speed 2 Mbps. As a tempter, O2 is offering the lower two speeds a 1 month speed boost upgrade. Additionally, the Unlimited Smart and Unlimited Max plans come with 12 months free Netflix, Sky Ticket or O2 TV.

Vodafone Spain is also offering speed tiering across its 5G unlimited data and minutes plans, with the additional benefit of a free year’s subscription to Pack TV Seriefans TV, with over 60 channels, as well as 3 months free subscription to the Tidal music streaming platform for its maximum speed subscription, advertised at 1Gbps both download and upload.

The final example is Vodafone UK, which has speed tiering across both 4G and 5G plans, with 2 and 10 Mpbs offered on 4G unlimited plans, and a higher (not-specified) speed for the Unlimited Max 5G plan.

 

What this illustrates is how operators are now turning their attention to speed tiering to differentiate services, with higher speeds offers targeting users interested in streaming live TV, and gaming on the go. We are also seeing much more bundling in of content and other goodies, either are a permanent part of the offer, or more typically, as a promotional offer. This allows operators to differentiate themselves in a world of all-you-can-eat plans and move users up the value chain with promotional offers in the hope of encouraging longer term take-up.

We will continue to monitor and report on 5G pricing developments over time. The Strategy Analytics’ OECD Mobile Voice and Data service tracks 3G, 4G, 4.5G and 5G mobile voice and data pricing in 37 OECD countries. If you are interested in learning more about our service, please follow this link.

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