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4G/3G/WiFi

4G: Just a Marketing Term?

4:20 PM -- Offering "4G" has become a marketing necessity for U.S. operators, as LR Mobile readers have pointed out in discussing what fourth-generation wireless actually is. (See What We Mean When We Say '4G'.)

What is striking -- when you look at how each of the big carriers sell 4G -- is how little difference there is between the marketing: None of the big players seems to know how to differentiate their newest service from rival offerings, as you can see below:

Table 1: 4G : U.S. Carrier Marketing
Operator Marketing Tagline
AT&T "The nation's largest 4G network."
Verizon "America's fastest 4G network."
Sprint "America's favorite 4G network."
T-Mobile USA "America's largest 4G network now faster than ever."
MetroPCS "Blazing fast 4G LTE."
Source: Operator data




Even digging into the operator blurbs a little doesn't present much of a clearer picture for the average consumer. AT&T Inc. (NYSE: T) markets its 4G LTE as "up to 10x faster than 3G" but didn't have any kind of average download speeds for the Long Term Evolution (LTE) service when I asked. Even if the average consumer happens to know how fast 3G is, the operator is further muddying the next-generation waters by marketing high-speed packet access-plus (HSPA+) as a "4G" service, when it used to be considered a fast 3G service.

AT&T is hardly alone. T-Mobile US Inc. also markets its HSPA+ network as a fourth-generation service. At least its latest TV ads explain that the user can stream TV faster and "watch cartoons" on their latest devices, offering some idea of why you should even care about the new service. (Let's not even get into their use of "unlimited" to describe speed-throttled plans right now.)

If anyone can explain what some of the Verizon Wireless 's 4G LTE Droid commercials are meant to convey to watchers who aren't a Transformers-obsessed 13-year-old boy I'd love to know:



MetroPCS Inc. (NYSE: PCS) manages to be a little different from the rest with their "blazing fast" tag-line for LTE. Ironically though, the MetroPCS LTE is slower than all of the rival offerings. Oh well, at least it is relatively cheap.

I think that rather than offering vague metrics, the operators might be better off getting a bit specific. Say, for example, how long it takes -- on average -- to download a song or a movie and how long it takes to upload photos to social media sites. I doubt that will happen though.

— Dan Jones, Site Editor, Light Reading Mobile

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joset01 12/5/2012 | 5:38:37 PM
re: 4G: Just a Marketing Term?

There's got to be a better way to sell this stuff than just using 4G anyway. Remember what a massive flop the initial 3G advertising was?

Pete Baldwin 12/5/2012 | 5:38:37 PM
re: 4G: Just a Marketing Term?

So, if you're an operator, would you rather your network be the "fastest," "largest," or the "favorite"?  I gotta go with "favorite."


Actually, looking at that table, this looks like a contest where there are no winners, just devastation. OK, maybe devastation is a bit harsh -- but this looks like exactly one of those cases where people throw up their hands and say "Screw it, whatever my phone does now, it's good enough."

gtchavan 12/5/2012 | 5:38:36 PM
re: 4G: Just a Marketing Term?

The Ipad writes LTE on its secreen when ever there is LTE.   Thansk to apple the consumer is going to be looking for it on their screen where ever they go.  ATT is so toast.

Aaron Copeland 12/5/2012 | 5:38:35 PM
re: 4G: Just a Marketing Term?

People will not care about the difference between 3G/4G/∞^2G etc. until they stop charging for (X) amount of data (or at least make the plans realistic).  


How it boils down: Faster network speed --> hit bandwidth cap quicker --> pay even more money.   

Gabriel Brown 12/5/2012 | 5:38:34 PM
re: 4G: Just a Marketing Term?

If one network is 4G and the other 3G, which are you lilkely to choose? It's that simple.

Gabriel Brown 12/5/2012 | 5:38:32 PM
re: 4G: Just a Marketing Term?

There are many examples of operators that pursue fast-follower and/or value strategies. This is valid and it works. Isn't this what T-Mobile is doing in US is doing?


Every competitive market has something similar -- for example, E-Plus in Germany, Three in the UK, or Tele2 in Sweden. 


But will it work long-term to stay on 3G as the rest of the market moves on? Probably not. Someone will always want to build a better network and secure the high-value, high-margin subscribers. The value players will follow as costs come down.

paolo.franzoi 12/5/2012 | 5:38:32 PM
re: 4G: Just a Marketing Term?

 


Gabriel - let me roll out a scenario...this is a hypothetical so all those who want to say "NO WAY" remember it is a hypothetical.


Let us say that AT&T decides that it is NOT going to do LTE.  Instead, it is improves the 3G coverage and performance of its network.  Because it is sticking with 3G, it slowly lowers prices of both voice calls and data bandwidth.  The investment is so much smaller that the cost to build and operate the network declines (no retraining - no stocking/approving new products - small focused buildouts).  This leaves the net margins at or above the 4G networks (maybe).


Network operators just can't fathom that method of competing and high end consumers would not want to be on that network.  On the other hand, if bandwidth caps keep coming and prices keep going up for data then maybe a cheap and cheerful network would win the bulk of the consumers.


seven


 

paolo.franzoi 12/5/2012 | 5:38:31 PM
re: 4G: Just a Marketing Term?

 


The reason to stick to the 3G is ZERO.  That is the cost to build a 3G network once it is built.  The profit derived from it basically goes to 100% - opex.  0 is cheaper than any new network.  That is why the telcos could stop POTS line loss any day they felt like it...just lower the price.


And no, T-mobile is building a 4G network.  I am talking a 0 capex strategy or as close to 0 as possible.  Yes - you lose all those high end customers and you also lose the need to constantly spend money to retain them.


seven


 

Gabriel Brown 12/5/2012 | 5:38:31 PM
re: 4G: Just a Marketing Term?

Sounds nuts. You should be in private equity.

shygye75 12/5/2012 | 5:38:30 PM
re: 4G: Just a Marketing Term?

What -- and kill a perfectly healthy BB thread? Next thing will be the suggestion that everybody stop writing stories about Tim Tebow or the Kardashians -- or the iPad!

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