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US Cell Phone Plans Among World's Most Expensive
Albanach writes "An OECD report published today has shown moderate cell phone users in the United States are paying some of the highest rates in the world . Average US plans cost $52.99 per month compared to an average of $10.95 in Finland. The full report is available only to subscribers, however Excel sheets of the raw data are available to download." (You'll find those Excel sheets — which open just fine in OpenOffice — on the summary page linked above.)
This is what I've always wondered, but learned from Slashdot comments. Why the hell mobile plans are so costly in US? I have the largest plan available from my phone company, 2500 minutes / 2500 sms per month and unlimited 3G internet. And that's still only 29 euro per month. And I did actually use that 3G internet connection for a month while waiting for adsl connection to be set up for my new apartment (hell, even running a server from it). No transfer limits or anything like that.
Yeah, mobile companies have extra costs from providing their infrastructure, but it just seems a lot what they ask in US. Sweden is mostly woods and non-urban areas too, so why is it done better here?
Maybe voice your opinion to the companies so they stop charging so much?
Well, let's imagine that coverage of the country directly affects cost. This might not be so outlandish as cell phone towers need to be erected to cover area. I would venture to say that Americans & Canadians suffer from sprawl much more than Finland and total area of dense population is probably more than five times that of Finland's. So let's assume that those cell phone tower maintenance (more harsh weather conditions across the US than Finland also) and building costs are passed on to the consumer. The United States and Canada are are fourth and second (respectively) by country size. Which could explain their inflated costs.
... or even small rich countries like Morocco or Dubai.
Of course this isn't the only factor, for example: I would assume China's median household income would affect their cell phone charges and cause them to drop despite country size. Wish they had data on China and Russia so this could be analyzed further. I don't see any in the data about these countries
My work here is dung.
So we aim to be number one in everything:
healthcare costs
shortest vacations
.
.
.
Well, that's a first! At last we're cheap in something else than marihuana...
Apparently the privatization of mobile networks worked out really well here!
X.
How many GSM towers does it take to cover the whole of Finland?
"As God is my witness, I thought turkeys could fly." A. Carlson
I would wager that some government taxes or fees on the infrastructure is what is causing the high prices.
Or at least, that's what the cell companies will claim... "It's the FCC! They charge us $1.00 for every square mile we cover per month in fees!!11!11!"
Either way, it's greed, and it's the basis for our capitalistic society, so it's not going to change.
Although I agree it sucks paying more than other countries, I'd imagine the largest reason wireless providers in the US costs more in comparison to the rest of the world is because of the exponential higher cost associated with deploying the infrastructure due to the physical size of the US. Of course, there's probably other more devious things going on that also attribute to the higher costs, but it's not all attributed to evil wheelings and dealings.
Average cost is one thing, but value is the cost compared to what we are compensated with. In Finland, data plans are not nearly as popular as in the USA. While I will concede that we are probably still paying more than other people in countries do for equivalent services, it is likely that the high cost we pay is in line with the cost of providing the many services to the 300 million Americans who desire them.
Among the most expensive and not even for a service that is advanced compared to other countries systems. And so called competition between carries is for which carrier can offer you which features for a high price ($55) plan. There is no real competition when it comes lower cost plans. And finally, my opinion for the most expensive, the lack of open systems. Carriers lock people into certain models of phones. Those lock-ins not only keep customers from shopping for the best service/price, but requires the carriers to earn even more profit to subsidize the exclusive contracts with the phone vendors.
United States total area: 3,537,441 square miles.
The area of Finland is 131,000 square miles.
I pay $29 but then I guess I'm not a phone whore and only need 200 minutes/month. It does make sense though, the stretch of I10 going from Phoenix to Los Angeles (where nothing but desert stretches for miles) is probably the length of Finland itself.
Take the average cited, multiply by the number of users, DIVIDE BY THE NUMBER OF TOWERS.
You don't realize how low the population density can drop until you ride a 3.3 gallon tank motorcycle through Wyoming. Number of phones per cell tower varies from 10 million to 1, sometimes.
In Europe (and most other regions outside of the US and Canada for that matter) the cellular user is not expected to pay the full cost of having wireless service. This is why other users who call your cell phone pay a premium for doing so and why the wireless customers over there often have free incoming calls. This is known as a "caller pays" model.
The US has (for better or worse) adopted a "subscriber pays" model wherein the wireless customer pays a higher price and for incoming minutes but those who call him and do so at the same rate as any other phone call (free in many/most cases). The US also has many perks that aren't part of most calling plans in other countries -- unlimited calling to X numbers, unlimited nights and weekends, unlimited mobile to mobile, etc, etc. Add in all of these perks and break down the monthly rate by the number of minutes used and many Americans wind up paying around $0.02-$0.03 per minute for their cellular phones.
It doesn't really tell us much to see a per month cost break down without looking at all of these other factors. In any case if you want to copy something from the rest of the world regarding wireless business models I would look at copying the concept of unlocked phones that are separate from contracts long before I'd look at copying their rate plans. I rather like to be able to call my friends who have cell phones without paying a penalty for doing so.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
VOIP FTW
I have my bill down to 35$ a month though AT&T... but I have found out something quite nasty.. My number is a Michigan one, since I was living there at the time. I have since moved to Pennsylvania but left the number the same since people know the number I have. Since I pay my bills online I never looked that closely at the bill. This last month I did.. and found out I am paying TWO sales taxes, Michigan and Pennsylvania. And when I called about it, it is because the number is a Michigan number.. because it is they can charge a sales tax on it.. as well as tax me because I reside in Pennsylvania. Their solution.. change my number (not a very good solution). I don't see why one should be taxed for where a number resides.
I should probably have added this when I submitted.
In these threads, there are often comments about population density in Europe making coverage more effective. Finland has a population density of 16/km2 - that's lower than Maine and 37 other US states.
Perhaps you think Finland must be tiny, in fact it's land area is 305470 sq km, that's bigger than Arizona. There are only five US states larger than Finland.
Maybe coverage is actually really poor, restricted to big cities? Take a look at this coverage map.
http://www.gsmworld.com/cgi-bin/ni_map.pl?cc=fi&net=te
Do any US states have coverage like that?
From TFA, 1680 minutes per year is considered high use. Really? Two hours twenty minutes per month.
Also stated is that same-network free calls and such aren't considered in the data, which skews prices higher in the US than is realistic. I pay $67 a month after taxes for unlimited everything but mid-day calls made out of network, with nights and weekends beginning at 7 PM. That's not great from a global perspective, but it's not the worst in the world, either, considering that I get 3-4k minutes of use and a few hundred pictures and videos sent in that interval.
Anyway, my real problem with European cell phones is how much is costs to call them. If I'm in Italy and I use a calling card to call an American land line, I'll pay around $0.02/minute. If I call an American cell, I'll pay exactly the same amount. If instead I'm in America and I call an Italian land line, I'll pay $0.01/minute, while a calling an Italian cell will cost me $0.15/minute on the same calling card.
On another note, I'm glad that my cell plan includes unlimited skype usage.
"I zero-index my hamsters" - Willtor (147206)
If someone here has a few hundred million dollars you can get rich quick by starting up a cell phone company to fill this void of competition.
My webcomic
Even if it was granted that cell plans in the US cost twice as much (or more) for worse service was because of the area of the US, that infrastructure has pretty much been in place for the past decade and hasn't changed much. Its been paid for already and maintenance does not cost as much as the initial deployment. So if it actually had anything to do with the cost of infrastructure, plans should have become more affordable, as they have pretty much everywhere except the US and Canada.
"I use a Mac because I'm just better than you are."
I'm wondering how the cost of a phone minute is broken out.
Fore example
What is the:
Profit = $??
Infrastructure = $?? (lets not forget the environmental wackos driving up legal costs for each tower)
Federal Tax = $??
State Tax = $??
Until we see a real breakout there is no way to assign blame. I suspect more than just the carriers are to blame for the high cost.
is pretty expensive too.
You're comparing small apples to big apples. You can't claim your plan is cheaper (better value) just because it costs less. What would your plan cost if it included roughly 2500 minutes of talk time? What about if you add data? Unlimited data? Personally, I'll be moving back to Australia soon, and the cheapest I can find for data is AUD20 for 1Gb of data (roughly EUR10) per month.
Mobile phones in Europe are subsidized by calls from fixed lines. Since you do not pay to receive calls, there are two rates for calls FROM land lines: a cheap rate to other land lines, and an expensive rate to mobile phones. Some carriers get more than half their income from incoming calls. When you call from a cell phone to a cell phone with a different carrier, the originating carrier usually pays more to the terminating carrier than the customer pays.
So don't use a land line to call a cell phone in Europe. Use another cell phone; their plans are almost universally cheaper.
Finally! A year of moderation! Ready for 2019?
I suppose that could be true...if you didn't spend five seconds looking it up. Phoenix to Los Angeles (by ground) is 372 miles. Utsjoki to Helsinki (Finland, by ground) is 795 miles. Your argument may be correct in general but in specific...
that infrastructure has pretty much been in place for the past decade and hasn't changed much
Which is why we are all still using AMPS analog cell phones that can be easily cloned and eavesdropped on by anyone with a scanner.....
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
On top of whatever taxes are part of the phone bill, the way a company gets a license to use RF spectrum in the United States involves spectrum auctions every few years. The last time the spectrum auctions happened, you had cell phone companies paying several billion dollars each for their licenses.
The thing is, companies never 'pay' for anything - they just pass the costs on to the consumer. So, how much of each minute is your share of the 2 or 4 Billion dollars?
I think the whole system is fundamentally broken and does not server U.S. Taxpayers very well, because even though it does raise revenue for the government, it also drives mobile phone bills way up. There's got to be a better, cheaper way to allocate spectrum than a highest-bidder auction.
in terms of cost expenditure.
Please try to educate, rather than stupify, your readerz.
Yours Virtually,
K. Trout
Because the US does NOT have universal GSM coverage. For example, a GSM phone is pretty useless in New Hampshire if you live north of Concord.
There are vast areas of the US with no cell coverage at all.
Several factors to consider:
1. The study is crap. The "high usage" plan is 1600 minutes/YEAR, 660 SMS/YEAR. That's not high usage; it's barely even light usage. The US plan selected has a low number in "fixed" but a high number in "usage"; this would suggest that they calculated what it would cost based on the cheapest-available plan. US overage charges are indeed ridiculous, in the 40c/min range, but nobody ever pays them because adding airtime to a plan costs very little.
2. US plans offer coverage nationwide and with no charges other than airtime for calls from anywhere to anywhere in the country. When there's an EU-wide plan providing the same coverage - no international charges - then we're getting close to an apples-to-apples comparison.
3. Population density is a real problem. I think the person upthread who suggested that the real metric that should be used is total # of subscribers divided by total # of towers is right - average population density is misleading.
The US has such expensive cell phone plans because the government has been protecting Big Telecom and turning a blind eye to exhorbitant pricing. In fact, by keeping prices high and using media spin to say just "how competitive we are" with the world, many US citizens are unware of anything better. It took Boost Mobile and Straight Talk to do something audacious and lower pricing on unlimited service to wake up competition again. Since the George W. Bush administration was pro rich, little was done to curb the excesses of big telecom and if big telecom can make gobs of money on older technology, there is no incentive to upgrade, thereby putting us further behind the technology curve. We all know what George W. Bush did to stifle science. For a while you really had only four choices: Verizon, AT&T, T-Mobile, and Sprint. There isn't a doubt that these telecom giants colluded to keep prices high. I remember the hoopla when Verizon came out with FiOS. Everyone was thinking we had hit a miraculous breakthrough in broadband which is just what Verizon wanted everyone to think. Verizon banked on the ignorance of consumers. In reality, FiOS is behind the 8 ball. Japan has 100MBiT to the home right now. When the Verizon sales rep tried to tell me how great it was, I replied, "Stop. Just please stop the bullshit sales pitch. Japan has had 10MbiT to the home just prior to the turn of the century. This is nothing new or miraculous. Don't bank on consumer ignorance." To which I got a snarled response. Qwest is doing this right now in the Arizona Valley. Oh my god, "12MbIT service," whoop ti dooo!"
Uhh, where the hell do you guys live that you pay less than 20% income taxes?
I have a T-Mobile pre-paid plan. $100 for 1000 minutes, good for 1 year. I got the phone for free with a promo they were doing, and seem to do quite often for new customers. If you don't talk much and just need a cell phone for its abilities to be just a phone, it is really hard to beat this price.
I fall in the low usage category in Finland and have paid a total of 8.52eur for all my mobile phone usage since November last year when I switched carriers. I commited to 24 months at 0.66eur/month and I get 50 minutes of normal price calling as bonus. The base cost has thus sofar been 5.94eur and the rest has been mostly international use. Though I went a few minutes over the 50 one month, those calls being billed at 6.9 cents/minute.
Normally one does not commit to any term and can switch carriers in about a week, as I have done couple of times. So the free 50 min/month is an attempt to get some heavy users to get locked into their service.
There's simply a lot more land to cover in the US, and that is covered by fewer companies than in Europe and elsewhere. Covering more land requires more towers and more expense.
What the heck is that a picture of? The black thing with the big dial. Is that, like, one of those record player thingys?
Somebody's got to pay for all those cute commercials. Maybe we should ban direct to consumer advertising of phone service.
The carriers have a lot of costs in the United States that they have to cover.
They need massive payrolls, for instance. It takes a lot of butts in seats to convince the local lawmakers that you have enough votes to unseat them if they don't do what you want. If the telcos didn't have control of so many voters they could threaten with layoffs, they wouldn't be able to get the tax breaks necessary to support their antiquated/anti-consumer business model. They'd have to change. Change is bad.
They also have to pay a lot of money to lawyers and on paper trails, because telcos are so highly regulated. They worked hard for that regulation, after getting a whiff of it initially, and got it increased beyond any semblance of reason so that no small carriers could afford to get anywhere in the business. They have to burn that money to keep other companies from cutting into their bottom line.
And it costs a lot of money to support antique technology, as well. By not modernizing, they save money in the short run, which helps them stay profitable, and makes sure that they need lots of people to run it, since it scales much more poorly than modern systems (which is excellent, since it means more employees/voters/bullying power). Not modernizing also limits services available, which is also good, since until we have good anti-network neutrality laws, someone else might be able to piggyback on those and get revenue, which might turn them into a real competitor someday.
Hey, keeping a strangle-hold on an entire country costs money! By paying absurd rates for crappy service, you're just doing your part. Keep up the good work.
Do these monthly rates include all costs, including taxes? Or are they only including the actual amount that shows up on the monthly bill?
You just need to change the way networks are built.
In my opinion, the best way to operate infrastructure is to move governance to a county level for what work gets done. The county government owns the line and the towers, and charges a base rate to any carrier that wants to provide service. At the county level, they can choose to subsidize infrastructure or charge the full cost to the carrier (which then would get paid for by the consumer).
You can have local shops provide local service, regional and national chains provide whiz-bang features for a premium, and of course the option of having extremely basic services for people who are under a certain income level provided directly by the county. But the point here is that you get a real ecosystem of competition, not a conglomerate that runs half the country because it has more financial resources.
This can work for all types of infrastructure too. Roads, banking systems, electricity, whatever. Keep the citizenry within reach of controlling the infrastructure, and I guarantee it will be reliable, accountable, and cheap.
Sure there will be corruption, but nothing on the scale of what's already happening inside the beltway today. It's tough to hide that new Cadillac when you live among people who will wonder where you got the money from. And you'll fix problems more quickly not only because you are doing good work for your neighbors, but also because you don't want to get harassed the next time you go to dinner about the lines being down last week.
"Whatever the market will bear" is the thing and I'm all for pointing out the differences and the excesses that the mobile market in the US as it may lead to improvements especially while the legislative branch is looking into the activities of the mobile companies. But what about the price of gasoline? I know that the prices we see in the U.S. are pretty bad, but it's far worse in other nations and pretty much always has been. Our cultures are different with different priorities. We have nearly no public transportation out here in the US compared to other nations and so everyone must rely on private transportation. The volume of demand enables lower fuel prices.
The mobile market is changing in the US, but traditionally, people have all used the existing wired infrastructure and so the cost and size of new deployements of wireless have been rather expensive and so mobile service is more expensive. Deployments are NOT quite saturated and there are still plenty of areas that do not have mobile service available. And until the infrastructure is near "complete" I wouldn't expect much change in prices. But once saturation is approached, we can expect the forces of competition to factor in a bit more... that and hopefully, we will have legislation in place to end the abusive practices of the mobile carriers.
But providers often don't cover sparsely populated areas, even when they are licensed to do so. They might cover only the major highways in the area, or provide just enough coverage to meet any licensing requirements.
The carriers with the best rural coverage might cost more - but is this because their costs are actually higher, or because their customers are willing to pay more for better service? Verizon has a distinct advantage over the other carriers in the USA, as they have more 800 MHz licenses than the others - so they can build less towers to provide usable service in rural areas.
I am sick of reading about how the "evil corporations" are just raping and pillaging us everyday. The people that spew this garbage everyday are the same ones that voted and still defend a man who can't even figure out whether he's for or against a single-payer health care system. How has the government helped us especially with the phone companies? After the AT&T breakup the government did allow them to merge back together did they not? Instead of figuring out ways to "subsidize" telcos (which just takes money out of the public's pockets from a different angle), why don't we try lowering the corporate tax which has proven to work before?
In the US, the monthly fee includes:
So we pay more, but we get more. You have to buy your own phone, and you have to pay to call mobile phones. Also, our plans don't have to be so expensive. By way of example, I have a 4 line family plan that costs $31.87 per line. All 4 lines have:
Now I look at what I get for $31.87/mo vs. what you get for 29 Euro/mo, and I am not seeing why I should be so outraged. Which is a shame really, because I do so enjoy getting worked up.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
Finland (data from https://www.cia.gov/library/publications/the-world-factbook/geos/fi.html):
Total area: 338,145 sq km
Population: 5,250,275 (July 2009 est.)
Urbanization: urban population: 63% of total population (2008)
US (data from https://www.cia.gov/library/publications/the-world-factbook/geos/us.html):
Total area: 9,826,675 sq km
Population: 307,212,123 (July 2009 est.)
Urbanization: urban population: 82% of total population (2008)
To directly compare these two countries first we will determine the population density.
Finland = 5,250,275 people / 338,145 sq km = 15.53 people per sq. km.
US = 307,212,123 people / 9,826,675 sq km = 31.26 people per sq. km.
If the cell carriers deploy towers which cover the same area then each tower will serve almost twice as many potential US customers as Finnish customers. This is discounting that a larger percentage of the US population lives in an urban environment. It is true that a rural infrastructure build out would be more expensive per potential customer; Finland would have the higher cost to bear in this case (63% vs. the US 82% of the population).
If we use a cell tower that will cover 1 sq. km of area that would be placed in an urban zone of each country it would cover:
Finland = (63% x 5,250,275 people) / 338,145 sq km = 9.78 urban people per sq. km.
US = (82% x 307,212,123 people) / 9,826,675 sq km = 25.64 urban people per sq. km.
I don't see how the argument of infrastructure build out is the defining factor in the order of magnitude in plan pricing seen between Finland and the US.
I don't mean to sound cold and cynical - but I am, so that's the way it comes out.
This is why I use T-Mobile pay as you go plan with my iPhone (off ebay). I pay 10 cents per minute/text message (no data plan, but wi-fi is everywhere I typically go). It costs me around $10 per month.
US consumers are not any more stupid than the rest of the world's consumers. But our pro-business government doesn't protect consumers like in the rest of the world. In the US, cell phone bills are not required to have a line item representing the subsidy for the initial phone purchase. Most other countries do, which lowers bills after the subsidy period expires.
Don't forget the phone subsidy. We don't pay full price for phones in the US.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
The missing piece of data here seems to me to be the relative profit margins between the higher-costing cell companies and the lower-costing cell companies. Do the U.S. cell phone companies make a substantially higher net profit margin than those in, say Finland? If so, then you're looking at the U.S. companies charging what the market will bear, and getting a higher profit out of it. If not, then you're looking at a difference in costs to the companies, and a resulting difference in prices. Plus, in either case, you've got to factor in things like the effect of 'caller pays' vs. 'wireless client pays'.
I am sure even cable tv charges in the US are among the world's most expensive and this includes satellite subscriptions too. I mean each package is an extra 10$ for around 5 channels which is on top of the 30-40$ that we pay for basic cable anyway!!!
A) No. Only the population centers of Wyoming are, because the outlying population density doesn't warrant a cell tower.
B) I don't live in Wyoming. I live in MI, and I live amid many dead zones.
C) 100% of Finland? Or 100% of the INHABITED areas. http://finland.fi//finfo/images/people/popumap_b.gif Unlike Finland, most of the US is NOT tundra. Places in the US which are sparsely populated still have a thousand people in the radius of a cell tower http://www.cast.uark.edu/local/catalog/national/images/maps/Population.dir/USpop1990.gif. I once made a call from a place where I could see 50km for 270 degrees and nothing behind me. I could count the mercury vapor lights in that area. 100. Someone paid to have that area covered. It probably wasn't the people who lived there. It was probably the other 250 zillion cellphone users in America.
D) I'm not complaining. I would have paid $100 for that one call, so my bills subsidizing Wyoming farmers pays me back eventually.
Did anyone look at the spreadsheets? What the hell are the numbers in them even supposed to be? It says "tax included" thereby implying that they are monetary amounts, but they don't say what unit, and the total for the US in the low usage one for August 2008 is 279.52. 279.52 of what units for what? For one month? Beats me.
Does anyone know what the numbers actually are?
Did this study compare the degrees of government regulation over rates, taxes, fees, etc.? In the U.S., upwards of 20% of the average bill is just that.
We have a pastiche of competing, expensive, mutually incompatible networks. It's like inventing the wheel five times. Are you surprised it costs five times as much? Duh. Americans are suckers. They do a lot of paying the most to get the least. Look at our health care system. All this is in the name of "competition", competition to see who can feed their steatopygean avaricious CEOs the most. Ugh.
You need rich people. When's the last time a poor person gave you a job?
Are you sad about all the layoffs that we have endured due to the economic downturn? Want more jobs to be created? Then start using your phone! Spend that money so that rich people will get richer and hence create more jobs.
Stupid selfish American consumers think that jobs just grow on trees. You need work, we need money to pay you with...YOUR MONEY....so stop complaining and start spending.
Sheesh.
First off, incoming calls are not free, well it depends on the carrier, but ATT, Tmobile, Verizon and Sprint, you pay for both incoming and outgoing.
I clearly wrote "free to the caller". In Europe (and much of the rest of the world), the caller pays a fee to call a mobile phone. In the US, it costs the same as an ordinary call (typically free).
Your free calling statements, are not really free, they are built into the pricing structure of the plan, another reason why the plans are more costly.
Of course they are built in. That was the whole point of my post was to point out all the extras that are included in the cost of the line.
Unlimited SMS is not free, its a addon that you pay for, ATT for example is $20 for unlimited, $5 for 200
With Sprint, it is not an add-on and is included in the cost of the plan. The $31.87 figure I quoted was the cost of my plan per line.
Data is not unlimited, it is capped at 5G a month for nearly all of the cellular providers in the US (Soft cap for now)
It's not like OP's plan is "unlimited" in the strictest sense. Every data plan on the planet is limited by the throughput limit of the device itself. With Sprint, the soft limit is pretty soft. If you use over 5GB/mo for three months straight, you'll get a politely-worded letter to please get a data card. Ooooooh. Scary!
Also, the price point does not change if you bring your own phone to the table rather then paying for the subsidized one.
This is true. But if you're bringing your own device, why not activate it on a prepaid plan and get unmetered (there, I didn't use the "unlimited" word. Happy now, Herr Pedant?) voice/data/SMS for $45/mo or metered airtime @ $0.10/min?
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
WTF?! Wouldn't cost go up linearly or at least squarely?? Saying it rises exponentially is just crazy.
Here in Ireland I'm on a pay-as-you-go plan with Meteor. Spending â20 a month gets me unlimited free calls and unlimited free texts to other Meteor numbers. As the majority of people I call and text are Meteor, I can spend that â20 on 3G browsing etc. I could also change this plan to unlimited free texts to any network if I wanted, sacrificing the free calls. For a non-business customer, it is excellent value.
I figured that cell phone plans were more expensive because of "free" phones, where the cost is really amortized over the length of your contract. If you keep your phone long enough (e.g. Verizon's "new every two" plans, where you keep your "free" phone for two years on contract), they more than recoup the cost of the hardware. But Americans don't think that way, they only care about the upfront freebie. You likely won't see a serious price drop until we get a SIM-based system with shorter or no contracts, or more pre-paid options, that allows hardware and carrier swapping and thus increased competition; perhaps that's why we don't have such a system here?
Perhaps you think Finland must be tiny, in fact it's land area is 305470 sq km, that's bigger than Arizona. There are only five US states larger than Finland. ...and Texas is two of them.
A Texan, an Arizonan, and an Alaskan were sitting around the campfire talking about how tough their respective citizens were. The The Arizonan says "boy, the average guy in my state sits in the 120 degree sun on a roof putting shingles on."
The Texan says "In Texas we're bull riding at age ten!"
The Alaskan didn't say anything, he just stood there stirring the fire with his dick.
Free Martian Whores!
I live in Chile. Sure, I have a $12/month plan (120 min/month), as an "upgrade" plan to get away from prepaid. But a normal plan here can cost between $80 to $120, if you want 3G.
This is why I don't have a cell phone. They are a rip off. At home I have an asterisk pbx system set up with voip. Maybe obama will help the poor americans and offer government aid to pay 75% of all cell phone bills too.
Cell phone provider apologists are like conservatives and lunar conspiracy theorists: their ideas sound neat and make sense upon first glance - but are torn down when hit with the slightest bit of scrutiny.
The "Americka is ruural" argument does indeed seem to explain why you have shitty service in Bumfuck, Wyoming (though the rural Fins seem to have service just fine). But why do we have shitty service in the New York City to DC corridor, one of the most densely populated areas in the world? How about the Los Angeles metro area?
So how often and how long will you pay this initial cost ? I doubt that the difference of price is really only that of coverage and maintenance only. Most probably tehre is also the fact they CAN charge that cost.
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"The highest were found in Canada, Spain and the United States."
Two out of three of these most expensive places are countries which have a very large land area. Thus a national carrier in the United States or Canada has to pay for several times the amount of infrastructure (towers, retail locations, etc.) than a carrier in a small European nation. Don't get me wrong I think cellphone service is way overpriced, but this is worth thinking about.
Finland tops the list, lets see what Wolfram Alpha tells us about "population density in finland vs usa":
Finland 17 people/km2
United states 33 people/km2
So that's in a country where the carries boast about fewest dropped calls (I'd get furious if I got dropped calls and had to pay for a new call).
Being from England, the one thing that always confused me is why you should pay to receive a call at all... If I am getting some unsolicited call from someone trying to sell me phone insurance I DO NOT want to be charged for it. Is there some kind of process where you can call your operator and have them recover from the people calling you the cost that YOU incur through receiving unsolicited calls???
Only in the US, and also it is largely us geeks' fault, are we so dumb that we happily set our prices high. We do it with tons of things. We act like we are so special to have the latest whizz-bang device/service and the more we pay the "cooler" it makes us. People used to be proud of driving a good bargain, getting a deal, or putting some pressure on a company... now we queue in line for weeks to pay top dollar and stupidly glorify it much to the big companies chagrin.
Maybe people should start to balk at overpriced devices and services and make the companies do a little sweating. Notice how during the "economic meltdown" companies were actually giving decent deals on things? It's purely that Americans have too much money and the consumer mindset has been implanted to the point where fanbois can't rant enough how it is a sheer pleasure to buy overpriced products like Apple's and that it makes them somehow elite and special to be above the unwashed masses who won't pay exorbitant prices for their well designed kit. Eh, fuck it, no one cares... keep throwing money at companies willingly and paying the highest prices for everything.
http://teasphere.wordpress.com - A little spot of tea
Sh*t, I was just about to score.
On Brazil, mobile plans costs even more than USA. And the funny part, We (brazilians) in average have much less money than a north-american.
Religion: The greatest weapon of mass destruction of all time
Just look slightly north.
If I were God, wouldn't I protect my churches from acts of me?
The FCC regulates the airwaves tightly and among those regulations are how powerful cell towers can be. It ends up being less than in many other places in the world. Less power means less range per tower and less ability to cut through buildings.
Here in the land of the costly, it seems like we pay more for just about everything, but get far less in return. No wonder the rest of the industrialized world laughs at us.
I actually have my international friends call me because what would cost me a staggering two dollars a minute for a call to Australia costs a nickel for them. Same for the United Kingdom. Same for fucking Canada, which is right next door. That's just international calling. For domestic rates, just like with our Internet, we see prices steadily climb wile services falter. (Comcast actually wants to charge me twenty dollars more to take two megabits per second off of my download speed. I pine for the days of Insight.)
Our infrastructural industries are so coddled and 'free' that they wouldn't last a day if they had to compete with the ones overseas, telecoms being major offenders. The only thing free about free trade is freedom from competition and accountability.
Two simple reasons why its cheaper in Europe:
1) Competition around a common standard. Europe mandated the use of GSM so everybody competes around the same standard. No vendor lock-in. Consumers can change carriers without having to change phones. Carriers can also share infrastructure so carriers don't have to build their own infrastructure. You can't have true competition if everybody is competing on different pitches.
2) Aggressive monitoring of carriers by government watchdogs to ensure that carriers really are competing and forcing changes where they are not. Compare and contrast with the 3 near monopolies you have in the states (ATT, Sprint, Verizon)
Well let's play a little compare and contrast then. My plan is around 45-50 Euro per month, don't remember precisely. For that I get about 1000 minutes, but those are rarely used. I don't use minutes to call anyone on the same cell network, I don't use minutes to call 10 numbers that I specify and can update whenever I like, and I don't use minutes after 7pm and on the weekends. Also has unlimited SMS, and unlimited EVDO internet (similar to 3G).
Ok so same basics. Now three big other things my plan has:
1) No cost to call me. It is a "subscriber pays" plan. Nobody pays any extra charges to call my phone, it is just as if they called a land line.
2) No long distance within the US. I can call any number within the 50 states, any of the 300 million people (who have a phone) and pay no surcharge for the call or per minute.
3) Complete US coverage area. Anywhere in the US, including Alaska and Hawaii, I do not pay a surcharge to use my phone. The whole country is my "home" area. Now please remember the US is almost 10,000,000 square km, Sweden is less than 500,000 sq. km. We are talking an area larger than the EU.
Can your plan say that? Can you roam all over the EU with no extra charges? Can you call Norway, and not pay long distance?
I'm not saying the situations are 100% the same, however I am saying that maybe there's a reason I pay a bit more than you do. You have to remember that we have states larger than your country. It takes a little more work to cover that.
~80% of the US population lives within 100 miles of a border, so really the cost of the infrastructure for areas of heavy usage should not be so spread out as it would be made to seem based on average population density. Sure there is a much larger area, but it can be served by much less infrastructure for most of the area as there is much less population and therefore many fewer concurrent users....
AT&T for example doesn't even bother to provide service in large parts of the interior and coverage in Alaska is non-existent outside the cities so making an argument on size doesn't really work (http://www.wireless.att.com/coverageviewer/)
What about the cost to Carriers in subsidizing phones from the manufacturers? I know very few people who pay full price for an unlocked phone from the manufacturer. Almost everyone takes a subsidized phone from the Carrier.
And since the manufacturers aren't going broke...
Well of course. Our treasonous Congressmen and Senators sold us out for the all mighty dollar. They let Ma Bell (AT&T) get their monopoly back together. ALL HAIL MAGIC JACK! Wish they were a cell phone company!!
Nokia Corp. Quite simply, the largest company in the country wants every Finn to use their product. Having a low, centralized population and comparitively low land mass would both help to minimize what they charge at home.
Also a cell phone in Europe or Japan can be used to pay for purchases, like a charge card. I had read a few years ago that an average monthly bill in Europe included over $400 of purchases. You can bet the provider gets a skim of that.
Here in Canada, I've worked with people that manage phone networks. Land mass vs. population is a big factor of cost.
Also, your bill will be lower if you dump that damn smartphone. North America has a pretty high penetration of iPhone and Blackberry compared to a few years ago. I see students and taxi drivers with them now.
Here in Brasil, a plan with 100 minutes + 50sms without anything else (internet or whatever) costs about $50/mo.
Internet with limited plan (1GB/mo) costs more $50, and a really good plan (1400 minutes/free internet) will cost about $300/mo. And by good i mean "not bad", or "well, it work at least".
I am not a heavy phone user. I never bothered with a data plan. I pay $40 per month for a minimal voice plan. Most of the time I'm with my laptop, so I don't pay extra for those features. It's also the most important reason I never bothered with an iphone.
But it could change. I'd be interested in getting all those if the fee is reasonable. But it is not. So I don't use those features. I think I am not alone. On the other hand the mobile market needs more people to use these features, which would boom related technology (software/hardware) innovations. In the end, the country loses.
Swedish heavy metal: Lots of excellent black metal, power metal, symphonic metal, death metal and Opeth (whatever they fall in)
U.S. heavy metal: Thrash and some of everything else, for about the same total good quality output. But we have 30 times the population.
Now, Finland has at least as much good heavy metal production as Sweden (no Opeth, but Sonata Arctica is almost as good), and they have a little more than half Sweden's population.
I'm also in Finland, and not a heavy user. I pay for four cellphones (me, wife, 2 kids), and our combined bill is rarely more than 5euro per month. Recently, my older daughter spent a week in England and called home/friends/whatever every day, the bill came to a total of 12 euro that month. That's with roaming fees and international calls as well as our usual domestic calls & SMS.
You folks in the USA seem to be getting reamed.
Those who can make you believe absurdities can make you commit atrocities. - Voltaire
The whole problem is the artificial scarcity that is promoted by the FCC selling licenses to the airwaves. Abolish the FCC, and let the people take back the airwaves.
This study is absolutely useless and clearly designed to manipulate the numbers!
I'm sorry, but this "study" is totally useless as a gauge of real world mobile phone prices. The high usage plan is only **140 minutes per month**. That's laughably low. Who put out this stupid study and what were their motives?
Yes, because we need more regulation in private business. Walmart is a prime example of a company that uses regulation to it's advantage. They want a mandate for health insurance because they know it will raise Targets health care costs, and they want a high minimum wage because they know smaller businesses will be forced to raise there prices to compensate.
Increased regulation only hurts smaller businesses and the middle class, and before you go off on how deregulation and Phil Gramm started the recession, Chris Dodd and Barney Frank, as well as the Community Reinvestment Act did for more to push private banks to give loans out to people who could not afford them, through, guess what? Regulation. If we would have just let AIG, Fannie and Freddie fail, we would be a lot better of then the Keynesian's who have taken over Government (That includes Bush, who, along with his Treasury Secretary and the Fed said we needed to bail everyone out or else).
suddenly campaigns become significantly cheaper to run. You could have a wider slate of candidates, and the influence peddlers should have less influence.
Bring back the old version of slashdot.
The companies bought bandwidth from the government with borrowed money. They now have to pay back. Just consider it another tax. Also the government refused to standardize. We are now stuck with a bunch of incompatible networks which prevents real competition between service providers. The cheaper countries did not do this. They lease the bandwidth for reasonable sums and set standards so that providers really compete. Hence lower prices.
The Governement charges the highest bidder for spectrum.
The winning bid then charges an arm and a leg for service.
This surprises you people?
Free our airwaves and then it will be more affordable.
hahaha! that's nothing - i pay around 180â mth for my few calls and texts, limited internet access and no free anything on my spanish telefonica iphone 3g. gotto love price fixing monopolies;)
This is why I don't have a cell phone. Keep it up if you don't want my money!
I've authorized Virgin Mobile to charge $15 to my credit card every 90 days. Yes, that works out to $5 per month. I get more than enough minutes to meet my needs. They call this the "Auto Top-Up" plan -- look into it people.
That that is is that that that that is not is not.
As a former customer service rep for two different cell companies, I can assure you that people do pay overage charges. Cell phone companies make it difficult and inconvient to check your useage because that makes it more likely you'll go over your minutes. There is no reason (but sheer greed) why any plan that has limited minutes doesn't have a display of your useage on the phone, visible at all times. And adding airtime to anything but a pay-as-you-go plan is guaranteed to result in a Kafkaesque nightmare, one which you will end up paying for, one way or another.
I just got owned for $61 for going over on my SMS "plan"...it's hard to imagine 1000 messages or whatever costing $61 to deliver. Talk about easy profits!
Thanks to the Magic of the Free Market, we have more competition and pay higher prices! USA! USA! USA!
I'm not sure if this is still common but last time I lived in the states it was common to pay to receive a call. The companies made out from both people. That is such a scam and combine that, at the time, with the lack of sim cards so your phone is tied to your provider and there seems to be no such thing as a good phone for free on a contract. You have to wonder why anyone would want to own a mobile in the states.
Yet some people defended this model because that's apparently how capitalism works.
I'll enjoy my £29 per month contract with my free Android phone, unlimited texts, unlimited internet and 800 anytime/any network minutes which, for me is more or less unlimited.
I've lived in the US and in Europe, and you can't compare the plans, use or utility between them. The US is huge, its population is huge, and most urban Americans use their cell as their only line, and they use it alot. 2000min a month is nothing, plus heavy data, You can't compare this to anywhere else. The UK has better rates, but doesn't cover nearly as much area or population. Try driving 30 hours away and make a call home and see how much it costs. In the US it's the same rate as it is if you were at home.
the exponential higher cost associated with deploying the infrastructure due to the physical size of the US.
Let me guess:
for each subset S of (the set of square mile grids that cover some US soil):
expend $x
build base station on S
Please explain to me how you build a base station that's partially in Los Angeles, partially in New York and partially somewhere in Alaska.
I might buy that if you do a 1 sq mile grid cover, the smallest number of cells that cover 90% of the US population is superlinearly larger than similar count for EUROPEAN_COUNTRIES[rand()].
But exponential?
Wood pulp and mobile phones...
Nokia; (the largest mobile phone company in the world) is Finnish.
As an aside and as a fellow Albanach, I'm largely ashamed of my country of origin. Finland have a similarly sized population. Living in Berlin for a couple of years, the only things we are known for is whisky and kilts. I can go and buy for example, Irish beer, cheese, milk, butter in any shop. Scotland's major production appears to be social security claimants.
Oh wait... shortbread. I can get shortbread...
Deleted
REHREHREHREHREHREH!!!!!!!!!!
I have mostly wondered if I'm going out of my mind for the last two years with regard to cell phones. I'm not sure if I realize that I am sane, Americans are insane, or the telco's are evil.
"There are some people that if they don't know, you can't tell them." ~ Louis Armstrong
I suspect, Good Citizen MartinSchou, the poster was being sarcastic as nobody can be that ignorant, although with the typical American, that absolute statement might not stand up very well......(Ya know, only one in one hundred thousand Americans realizes America is a socialist plutocracy (those plutocrats have completely monopolized socialism just as they've monopolized everything else!).
As a result the big telecomm companies get to do exactly what they want and have the government throw barriers in the way of any new upstart competitors that would challenge their oligopoly pricing. If we Americans actually owned our own elections, we wouldn't exist for Big Business' sake: it would be the other way around.
Not sure if anyone has mentioned this yet but whereas in the US, FCC auctions the radio spectrum, and licenses can cost several billions, in Finland the Communication Authority gives them away for free to the best applicant.
This is rumored to change in Finland but hasn't yet changed. Preliminary plan is to auction 4G licenses and use the money for broadband infrastructure.
In India, cell phone rates are the lowest in the world. I spend around 200 Rupees (47.97 Rupees=$1) per month for my cell phone service. I get unlimited free SMS to local cell phone numbers. Incoming calls are free. There are no such things like contact and disconnection fees. There are rate cutter options. If I recharge with 49 Rupees card, I can call any same service number at 10 paisa (100 paisa=1 Rupee) per minute.
Love me or leave me. Hey, where's everybody going?
Assume the Finland price for all of western Europe - and we pay 5x the cost for something 5x as expensive to provide... People don't realize how large the US is.. and that most plans now days there is no roaming from sea to sea.. thats alot of area to provide for..
Hmm, a well intentioned line of thought. Now let me show you the real deal:
Norway's population density is 31/sq mi, less than half that of the US. In terms of population density, Norway ranks 211th of all the world's countries. Nonetheless, I receive 3G service in a boat a kilometer off the coast of Hitra, an island with a population of less than 5,000. I had continuous coverage on the eight hour drive from GjÃrvik to Trondheim, including in windblasted high mountain tundra that receives many meters of snow in the winter.
Are you sitting down? If not, prepare yourself: my unlimited Telenor data subscription costs less than my 5GB/month Verizon plan in the states.
Yeah, that's right. Cell plans in the US are a FUCKING RIPOFF.
Canada is the champion. You people, in the States, you don't know how good you have it, in comparison. In Canada pricese for telecomm are easily double yours ! Look at this, for instance: http://www.cellphones.ca/cell-plans/960/ Another example, because some people seem to like iPhones ? The iPhone plans in Canada (with Rogers) are more than double what people in the US pay, with AT&T. And on top of it all, we pay federal tax, and then provincial tax on top of it, so then because the 6.95$/month is already a tax (kind of illegal, in the end (longer story), but tax) in the end we pay tax on tax on tax. Howzat ? And still, amazingly enough, right now Bell is losing money on wireless (and no, not even the service is good - it's contracted out in India, and it's miserable) ! This is beyond belief ! I can only assume that these peoples' levels of corruption, laziness and incompetence are unsurpassed (because we must be the first in something !) Little wonder, then, that Canada has a pathetic cellphone penetration rate. PS. I might have used some Engrish here. Sorry - English is not my first language.
Hardware subsidies.
The US (Canada too) is one of the largest markets for hardware subsidies (anyone ever gotten a phone for free on an activation?) in the world and some countries/providers do not subsidize the hardware for their client's at all. That means the provider pays for the rest of your phone until profit from your features and plan cover the cost. The discounts enforced on your iPhone by Apple (as well as all the other discounts on hardware common today) have forced the prices of rate plans and features up so carriers can recoup the cost of that hardware they provide for so cheap.
So, you can either buy a new phone at full price and have great rate plans and cheap features or get a free (or nearly free) phone and pay more for the rest.
Verizon /JUST/ built a tower on my family's property, expanding their coverage in this region. There are /plenty/ of towers left to build. Alltel is the only other carrier in the area, and we live on a freaking interstate.
-- Nate
What I was surprised by, was how both caller and reciever pay. When I started US cell phones over Skype, that it mattered how many "minutes" the recipient had left, when I was already paying for the conversation through Skype.
I'm calling you, I pay. Now if you run out of battery, I can see it shutting off. Otherwise, I'm ALREADY PAYING, so...
And yes, tired of the population density argument. Several countries in Europe have a smaller density, and almost a 100 countries around the world to too. In addition, several of the world's largest cities are in the states. If you can't cover everything, cover those, and cover a whole lot of people cheaply.
We are all God's parents.
coverage
...
If it's really the infrastructure that's so expensive, why does coverage suck just as bad as it did 5 years ago? I would be more inclined to believe it's the same as any other industry in the US. They charge what they can, because they can. There's no magic bullet, not spreadsheets involved. American consumers will buy anything they see on TV at any price. Just tell them how amazingly affordable it is and they'll fall for it. Terrorists and socialism aren't destroying this country, monthly payments are.
Shift happens. Fire it up.
Cell phone companies make it difficult and inconvient to check your useage because that makes it more likely you'll go over your minutes
Bullshit. I've personally used Verizon and T-Mobile and on both of them all you need to do is dial a special code or visit the webpage to check your minutes. It takes less than 15 seconds to dial the code and receive a response. My understanding is that AT&T has a similar system in place as well.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Mod parent flamebait. He can't refute an argument without resulting to petty insults against wide swaths of the population.
Thank you.