Swedish LTE Challengers Wield Unlimited Offers

Sweden's newest Long Term Evolution (LTE) service providers, Tele2 AB (Nasdaq: TLTO) and Telenor Group (Nasdaq: TELN), are using lower prices and unlimited data plans to take on rival Telia Company , which has almost a full year's head start on delivering commercial LTE services in the country.

The two operators -- which have a 50-50 network sharing joint venture called Net4Mobility -- launched their own individual "4G" (aka, FauxG) services last week. Both operators priced their monthly LTE tariffs below TeliaSonera's. And, unlike TeliaSonera, neither operator has put caps on data usage for their next-generation mobile broadband services. (See LTE Showdown in Sweden and TeliaSonera Limits P2P Over LTE .)

The pioneering Swedish operators could well hold lessons for operators in the US as Verizon Wireless is set to launch its much anticipated LTE service next month, going up against the 3G HSPA+ services from AT&T Inc. (NYSE: T) and T-Mobile US Inc. and the WiMax services from Clearwire LLC (Nasdaq: CLWR) and Sprint Corp. (NYSE: S). (See Verizon Confirms December LTE Launch .)

Here's how the competing LTE offers stack up in Sweden:

Table 1: Swedish LTE Price Comparison
Price Per Month Data Allowance
Tele2 299 Swedish kronor ($43)* Unlimited
Telenor Sweden 549 Swedish kronor ($79) Unlimited
TeliaSonera 599 Swedish kronor ($86) Capped at 30 Gbytes per month
* For the first 12 months of an 18-month contract, after which the price goes up to 499 Swedish kronor ($71) per month

Carl-Erik Lagercrantz, chairman of Net4Mobility and vice president of Telenor Sweden, talked about his company's new LTE service at the recent Broadband Traffic Management conference in London, and explained why an unlimited offer is important for now.

"[For 4G] we have unlimited subscriptions with fair usage and no caps on usage," said Lagercrantz. "That's not a long-term viable solution for an operator but it surely generates a lot of subscribers in the marketplace."

While recognizing that operators will need to manage the bandwidth on their 4G networks, he warned that such tactics needed to be implemented intelligently so that users are not blocked from doing what they really want to do.

"Attempts to limit users' use of the network -- I find that in the longer term a little bit hazardous," he said. "If you talk about traffic management in the network, you have to maximize what users want, not minimize what they want."

Meanwhile, Telenor Sweden's network sharing partner Tele2 is out to compete on price for LTE services. (See Tele2 Launches LTE in Sweden.)

"We're the cheapest," says a Tele2 spokeswoman. "We want to have the best [and cheapest] deal for our customers."

With LTE devices limited to just two dual-mode 3G/LTE dongles in the Swedish market -- one from Samsung Electronics Co. Ltd. (Korea: SEC) and another from Huawei Technologies Co. Ltd. -- there are not many ways to differentiate the services except on price and data allowances at this point. (See TeliaSonera Shares Verizon's LTE Tablet Desire .)

However, TeliaSonera sought to differentiate its own LTE services recently with the introduction of three tiers (dubbed "Medium," "Large," and "Total") that are priced according to network speed and data allowance. For example, the Medium 4G package costs 299 Swedish kronor (US$43) for network data speeds between 5 Mbit/s and 10 Mbit/s and up to 10 Gbytes of data. The Total package, in contrast, costs 599 Swedish kronor ($86) per month for data speeds between 10 Mbit/s and 80 Mbit/s and up to 30 Gbytes of data usage. (See TeliaSonera Blazes LTE Trail of Tiers , TeliaSonera Develops New Mobile Data Model, and TeliaSonera on LTE: Just Do It!.)

— Michelle Donegan, European Editor, Light Reading Mobile

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