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# DT’s NB-IoT launch reveals cross-Atlantic gulf in M2M pricing

Deutsche Telekom (DT) has announced its new NB-IoT SIM offerings, powered by the connectivity management platform from its spin-out 1NCE. The bundles can be used across the whole of the EU, and allow us to examine the pricing of LPWAN services again.

According to Wireless Watch’s sister service, Rethink IoT, it’s hard to draw any solid conclusions from the calculations, although MNOs are moving away from pricing devices on a per-message or per-month basis, and towards a package that would price the device over its lifetime.

In DT’s case, the LPWAN-focused offering is being sold as a five-year deal, but customers can top the device up should they need to extend this.

There are two flavors. The first is called Business Smart Connect LPWA, which as the name implies, is focused on NB-IoT but has 2G fallback, and provides a five-year contract. The second is Business Smart Connect M2M, focused on higher speed LTE categories and 2G, and available in three-year contracts.

There is a flat fee for the SIM card, with a lifetime allowance of data and 250 SMS messages that can be sent or received. The SIMs can be topped up, if needed, but it looks like it might be more cost-effective to bump up a tier at the time of purchase instead of gambling on not needing to increase the allowance. There is also an eSIM option.

In terms of the cost, the LPWA package has three tiers. The first, called tariff S (for small), costs €7.95, and includes 6MB of data, which equates to 100KB per month on its five-year plan. The big factor here is the effective cost of having to push a new firmware image to the device to update it – as a 3MB top-up for the S tariff costs €4.

The next tier up is M(edium), and costs €9.95 for 16MB of data, equivalent to around 267KB per month on the five-year timeframe. Paying the additional €2 for an extra 10MB sounds sensible, but in terms of millions of units, it’s perhaps not in the budget. The highest is L(arge), and costs €12 for 30MB of data – akin to 500KB per month over five years.

The M2M equivalent is slightly more expensive, but has a lot more data in the buckets. The S tier costs €9 and gives 300MB of data, while M costs €17 for 1GB, and L costs €30 for 3GB. Having to top up will have customers reaching for their credit cards. In the LPWA tiers, the costs are €4 per 3MB in S, €5 for 8MB in M, and €6 for 15MB in L. In M2M, the costs are €4.50 for 150MB in S, €8.50 for 500MB in M, and €15 for 1,500MB in L.

The cost of 1MB of data is very different in each of these packages – €1.33, €0.63, and €0.40 in the LPWA tariffs respectively, and €0.03, €0.017, and €0.01 in the M2M tariffs respectively.

In terms of comparisons, AT&T announced its US pricing back in May. This has a monthly focus, rather than a five-year frame. Unsurprisingly, these are a lot more expensive, and clock in at around $1 per month ($14 per year) for a 500KB monthly bucket. The 1MB bucket costs $20 per year, with 5MB costing $50 per year, and the 50MB monthly bucket costing $144 annually.

So then, in terms of cost per MB, it all looks a bit arbitrary. We’re sure that both operators have run the models and determined that this is the best pricing structure, but such differences mean making direct comparisons a bit redundant. In terms of the smallest tiers, AT&T costs $14 a year for 6MB of data, while DT’s pricing works out to €8 a year for the 6MB – but of course, in DT’s world, you would have depleted the five-year allowance in one year, and replenishing the 6MB the next year would cost €8 again.

On that basis, it is easier to think of DT’s option as costing €8 per year, and in the current exchange rates, that works out to $8.86. However, if you follow DT’s line of thinking, that 6MB is plenty for five years, then buying the equivalent package from AT&T is going to cost $70, compared to the $44.30 – or around 1.58 times as expensive.

However, the more direct comparison is the L tariff from DT, with its €12 five-year price and 30MB bucket, which lines up nicely with five years of AT&T’s 6MB package. On that basis, the two services have massive variations in pricing – with DT costing $13.30 and AT&T costing $70, or rather, the same data bundle in the USA costing 5.2 times as much as it would in Europe.