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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.)
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.
It's because US carriers compete based on who has the iPhone and who has the Pre rather than network price/quality. Then users "buy" $800 devices for "$99" and make fun of uncrippled foreign cell phone brands because they're "so expensive", and have useless features like application downloads from Sourceforge.
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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...
Oh I'm convinced that very large portions of telecom money go to congress... just not in taxes.
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What I'd be intrested to see. .instead of how much we all pay is.. how many customers are served Per tower - and how many towers vs area vs coverage.
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
comes out to be:
Western Europe | 514 people/mi^2
United States | 86.5 people/mi^2
Basicly it takes 5 times the area to hold the same numebr of people - asume population was evenly spread (i know it isn't) it should cost 5 times as much to provide for the same number of people..
"Average US plans cost $52.99 per month compared to an average of $10.95 in Finland."
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..
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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!"
On the other hand I think US carriers are guilty of heavy upselling. If I live in a dense city in a dense area (Boston, New York, DC, etc) and do 99% of my calling from there why can't I pay for a local plan and avoid subsidizing the tower/person costs of residents of Wyoming?
Seriously, I don't know what he's smoking. I pay roughly the same in income tax here in the US (once you add up federal, state and things like social security tax) as I did in the UK, but also get to pay for medical. Awesome!
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Yes, companies should try to maximize profits. However, what you just described is a monopolistic profit maximizer. Understandable with a new wonderdrug that cost billions to develop, but it should absolutely not happen with general health care and phone network cartels of all things.
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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.
> about 70% of the people in the US LIKE what they have
As a European living in the United States, I think that is because the people suffering by far the most in the US are so ill-informed about other Western democracies and so brain-washed from an early age, that they actually are proud of the abuse they're suffering in this country! After all they constantly hear they're "no. 1". What they generally don't hear is that the US is "no. 1" in the percentage of uninsured children etc. Even the ability to legally bribe politician here, called "campaign contributions", is called "freedom of speech." I guess corporations and rich people have much more "freedom of speech" than someone with a median income.
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Or how about you use Finland's population density instead, which turns out to be almost exactly half of that of the U.S. That pretty much destroys your argument.
Or more properly, get government regulation in place to stop the pricing schemes that all of the US providers are in cahoots with. There is no reason sending a text message should be so expensive or even a voice call once the infrastructure is in place.
Except the odd thing is, a value added tax is a tax on creation, not consumption. You don't "add value" by consuming, you add it by creating. A sales tax is, in fact, the best consumption tax. After all, would you rather be taxed because you built an addition onto your house, or taxed when you sold the house for profit?
That said, all forms of "consumption tax" (either sales or VAT) are regressive because they disproportionately tax people who spend higher percentages of their incomes on consumables. You want to make it progressive, you make the sales (or VAT) rate proportional to total price, so you pay more tax on more expensive things.
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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.
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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?
Okay, in that case you'll be pleased to know that there are plans even cheaper than yours in Europe. For the summer, I'm using a pretty nice flip phone that cost me 50 CHF (~ $45) up front and costs me about 10 CHF/month, also with unlimited text. But I also get a lot more talk time than you. Also, keep in mind that Switzerland is one of the most expensive countries in Europe.
The point is that the same American plans can generally be found in Europe for cheaper. There is no reason that those "outrageous plans" (as you put it) need to cost so much.
Cell phone services over here are just dreadful. Why you all pay so much for such mediocre service, I really don't know.
Do you know how to pay less for better service in the US?
I didn't think so.
There's your answer. In the US, you have the choice of high-priced, mediocre service or no service at all. To make matters worse, a cell phone has almost become an essential tool for most Americans. So if you want better and cheaper service, your only (unrealistic) choice is to leave the country.
Ideally, our capitalist economy should keep all the prices down, but the cellular giants collude to keep prices high and service poor. They also lobby the government to prevent any mandated change.
It's completely appalling, but very very hard to change as a voter choosing from an extremely limited subset of corrupt politicians. That said, no country is perfect. I am sure there are some things about the US that you find superior to Britain as well.
It isn't THAT bad over here...at the worst you see on any polls, about 70% of the people in the US LIKE what they have. I dare say you can't hardly come up with any other topic that many Americans would agree on. So, why try to chuck the whole system, that the majority of people are seemingly happy with? Why not just fix what parts of the current system are broken?
Because your health care system, such as it is, is the least efficient health care system in the developed world. Health care in the US costs twice as much per capita as the next worst nation, for what amounts to roughly comparable service. And really, the service is only roughly comparable if you ignore the significant numbers of people in the US who aren't insured at all (in the neighbourhood of 45M people, last time I checked), and don't really get any service unless they're catastrophically ill.
Just because your corporate masters have made you eat shit and like it, doesn't mean the shit is good for you.
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Ok, I'll take the bite and go offtopic, since I'm not the first one.
Born in Europe, lived there 25 years, I've lived in the U.S. 13 years so allow me to know exactly what goes on in both places.
You DO NOT pay less taxes in the U.S., it just seems so. Wanna crunch some numbers?
Using Sweden as an example, feel free to use any other country
Sweden minimum wage: $20/hour
U.S. minimum wage: $6.75/hour
Sweden taxes off the paycheck: 50%
US taxes off the paycheck: (depends on which state you live in: 20% to 30%)
Sweden health care system: excellent
US Health care system: Excellent if you are rich. Add $200/month (my plan with $500 deductible, which is ridiculous that I still have to pay the first $500 and also doctor visits) or more for medical plan. That's $2500/year. Pretend that it's coming out of your paycheck as part of your taxes and see how much higher your tax percentage goes)
Sweden education system: Universities (less than $5000 for 5 years including books, much less with scholarships)
U.S. education system: Universities ($50,000 to $400,000+). $50,000 gets you a degree in a low quality university. Add that to your taxes.
Swedish High Schools system: very good
U.S. High School system: Mediocre
Sweden paid vacation: 5 weeks/year
U.S. paid vacation: 2 weeks/year (when you're lucky, I don't get any, only unpaid time off).
Street lights in Sweden: really good. Even rural areas are well lit.
US: not even big cities are well lit everywhere, nearly nonexistent in rural areas.
Want me to go on? Nobody likes to pay more taxes, but comparing tax rates directly without taking into account everything else is pure fiction.
By the way, I'm not swedish. I could have used any other country as an example.
Did you happen to know that Pharma spends more for advertising in the US than R&D?
How about we get like almost every other country in the world, and ban prescription drug advertising, that would cut down on their costs dramatically, and make drugs cheaper for everyone.
What they generally don't hear is that the US is "no. 1" in the percentage of uninsured children etc.
Uninsured does not equal no health care. The US has universal health care, it's just way too expensive because it is generally done in the ER. It also misses out on the cost savings that occur when you do preventative care. This is why it is so infuriating to see the left and right wing nuts going on about "socialized health care". We already have it! Let's sit down and figure out a way to cut some of the costs.
Even the ability to legally bribe politician here, called "campaign contributions", is called "freedom of speech."
The alternative is the "Silvio Berlusconi" model, where only the super-rich can afford to run. Limits to contributions and the wide-open nature of US campaign finance limits the corruption. The hardest part is the "soft money", which is constantly an issue here.
I guess corporations and rich people have much more "freedom of speech" than someone with a median income.
Rich people, in general, have more of everything than someone with a median income. Those are the breaks. Even in colonial days, a rich person could print up more pamphlets than a poor person. I suggest accepting this fact and working around it rather than fighting it.
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In 1986, EU pharmaceutical R&D exceeded U.S. R&D by about 24 percent, but by 2004, EU R&D trailed U.S. R&D by about 15 percent. During these 19 years, U.S. R&D spending grew at a real annual compound rate of 8.8 percent, while EU R&D spending grew at a real 5.4 percent rate.
The US spends 15% more on pharmaceutical R&D than the EU. Other regions also invest in medical R&D. The USA is certainly not paying for the entire world's pharmaceutical R&D.
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