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It's raining sub-$100 LTE smartphones

But pricing for two-year voice, text and data service remains high

April 5, 2012 06:01 AM ET

Computerworld - Wireless carriers recently began offering new LTE-ready phones at bargain-basement prices of less than $100, but those customers still must commit to paying a minimum of $60 a month, or $1,440 for two years of voice and data service.

Two-year plans can be even steeper for extra data or texting on some carriers. Still, such costs have become an accepted fact of life for Americans who want mobile phones. As their buying trends show, customers value having computing and communications capabilities in a convenient wireless device.

Nielsen recently reported that Americans are buying up smartphones at a fast clip. Smartphones accounted for two-thirds of all mobile phone purchases in the three months from December through February.

Pre-paid phone plans, generally a cheaper option, are still a small portion of the total smartphones purchased, while most buyers are willing to sign up for a two-year service plan that can get expensive.

The newest devices under $100 are likely to continue the smartphone buying trend. Sprint recently announced the upcoming LG Viper 4G LTE smartphone with a price of $99.99 after rebate and subject to a two-year service plan. AT&T will sell the Nokia Lumia 900 for $99.99 with a two-year plan, starting April 8 for use on its LTE network.

Shortly after AT&T made its Lumia 900 announcement, Verizon Wireless said it would offer the LG Lucid smartphone for $79.99 after rebate and with a two-year commitment, and noted that the phone is geared toward first-time smartphone buyers. These are the buyers who aren't accustomed to monthly wireless service plan sticker shock.

As far as the service plans go for these three carriers, Sprint is sticking to its unlimited data approach for the LG Viper. Sprint still requires an "Everything" plan, which includes voice, text and data for $70 a month, while separately increasing that amount by $10 a month for smartphones on data plans.

AT&T and Verizon both start at $40 a month minimums for voice plans, while the minimum data plan on AT&T is $20 a month for 300MB, then increases to $30 for 3GB and $50 for 5GB.

Verizon recently began promoting a limited-time offer, complete with TV ads, for doubling the amount of data per month, charging $30 for 4GB (normally 2GB) $50 for 10GB (normally 5GB) and $80 for 20GB (normally 10GB). Verizon hasn't indicated how long its double data offer will last.

If the data costs haven't outraged consumers lately, some bloggers are picking up the cause. "It looks like a price war is already on for Long Term Evolution (LTE) devices, but 4G data plans remain stubbornly expensive for most smartphone users," wrote Dan Jones in Light Reading Mobile.

Jones noted that part of the promise of LTE technology was that it reduced the cost of delivering data to users, even though the savings is not being passed on to consumers. Noting that the carriers are spending billions of dollars on deploying LTE, he added, "My impression is that we're just looking at business-as-usual -- or worse -- from the operators with regards to 4G data plans."



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