At NBT Research we have constantly beat the drum on the importance of being the LOW COST operator in the coming 4G LTE world. 10X faster speed is bringing a whole new mass market to wireless broadband, and in most countries $20-$25 a month for a MiFi card and 8G of bandwidth is the mass market price. To make MONEY at these price points means your price-per-POP (point of presence) needs to be the LOWEST vs. competition.
VelaTel's emerging market JV business model where TD-LTE 4G spectrum owners JV with VELA to build the absolute LOW COST carrier (with lots of help from equipment/financial partner ZTE Corporation and VelaTel's 25 years of experience building high performance/low cost wireless networks) is the kind of business model than works in this speed and price value world. Low cost carriers can be VERY profitable at $20 a month per subscriber in the highly efficient TD-LTE technology.
Today respected analysts Tariff Consultancy (TCL) released a report that global LTE mobile broadband pricing will decline by as much as 60 percent during the five-year period between 2012 and 2016. The study finds that LTE is currently being promoted as a premium mobile broadband product based on a high theoretical download access speed. However, the firm anticipates that LTE mobile broadband pricing will decline as more operators worldwide adopt the technology.
By the end of 2016 TCL forecasts more than 250 million users of LTE mobile broadband services, and average pricing per subscriber will decrease to around $26 per month--a decrease equivalent to more than 60 percent in LTE pricing over the five-year period.
We are building our pro-formas for VELA/ZTE networks to reflect this type of pricing at the higher end consumer. With starter 500 megabit to 1 Gigabit data plans, pricing will be at the $10 prepaid rates in many of the areas VelaTel operates within.
VelaTel's low cost operator structure is the KEY competitive advantage within their regional 4G-LTE carrier strategy.