Slashdot Mirror
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.)
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-$0.03 per minute for their cellular phones.
It doesn't really tell us much to see a per month cost break down without looking at all of these other factors. In any case if you want to copy something from the rest of the world regarding wireless business models I would look at copying the concept of unlocked phones that are separate from contracts long before I'd look at copying their rate plans. I rather like to be able to call my friends who have cell phones without paying a penalty for doing so.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
You'd be wrong. The average population density in Finland is half that of the U.S. The U.S. has, on average, 31 people per square km; FInland has, on average, 16 people per square km. This according to Google. The total size of the area to cover shouldn't be relevant assuming similar percentages of the population use the service. Besides, the U.S. cell providers leave large swaths of the U.S. uncovered anyway....
Check out my sci-fi/humor trilogy at PatriotsBooks.
I have my bill down to 35$ 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?
True competition? Then why are your prices so high?
In a truly competitive market prices for comparable items converge towards a low price, as long as they aren't luxury items.
Look around in your supermarket. You can probably find ten different brands of bread, all costing roughly the same per unit of weight. The price will be fairly comparative to European prices (should be lower in the US as you have lower taxes and lower wages). That's true competition.
Not so in your cellphone market.
Well, at it's good to know we don't have a monopoly on mindless, nationalistic arrogance here in the USA. I was starting to worry. Thanks for making me feel better.
Self proclaimed typo king, and inventor of the bear destroying coffee table (patent not pending).
The only reason it worked out well here is because of the OPTA (telecom watchdog), which is, not surprisingly, a government organization. Without them, we'd still be paying through the nose.
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."
A great deal of consumer relations in big business nowadays boils down to this Frederick Douglas quote:
Welcome to the Panopticon. Used to be a prison, now it's your home.
And the finer point.
It costs money to put up these towers.
Europe has a larger population compared to US, yet it has a lesser amount of land to cover with cell sites.
As a result, people/tower ratio is quite good in Europe and partially contributes to better plans.
We have the exact opposite here in Canada, where the population is 10 times lesser than USA and land is larger. You should look at our plans. I am paying 25$/month for 500MB, plus anoter 45$ for voice (I'm rather lucky as I have a grand fathered plan which gives me unlimmited voice).
Today, for the kind of money (about 90$/month). I would get 1000 min and 500 MB and 250 SMS.
Russia: 17,075,400 km^2. Population density: 8.3/km^2
Phone plans: still cheaper than in the US.
You maay have the largest plan for sweeden.. but do you roam when you go to the UK? even if not.. all of Western Europe is ~1/3 the size of the US and has 1/3 MORE people
United States | 86.5 people/mi^2
At 450,000 km2 (173,746 sq mi), Sweden is the third largest country in the European Union in terms of area, and it has a total population of over 9.2 million. Sweden has a low population density of 53 per square mile.
She made the willows dance
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
It would be interesting to know how much coverage all of Finland gets. Sure, the plan is great when you're in a city... but how good is it when you go to a random part of the country? What's the cell coverage like?
Coverage is almost same everywhere, 99.6% for whole country. And like you said, the northern parts dont have a lot people living nearly, but they still cover those areas.
News alert... The wealthy in the US already pay a lot of income taxes as the system is highly progressive. [snip] 39% of the ...total personal income taxes came from top 1%
While you are likely technically correct, there's a nuance that needs to stated: Warren Buffett noted that there are significant inequities in this so-called "progressive" tax system:
http://www.timesonline.co.uk/tol/money/tax/article1996735.ece
For those who do not RTFA, Warren notes that it's essentially ridiculous that he pays more as a percentage of his wealth than his secretary (who makes about $60K/year) and who has substantially less disposable income. Roughly summarized, Warren has essentially noted "tax the rich--it's OK, we'll figure out a way to make more."