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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?
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.
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 must be the extraordinary customer service that is driving the costs up!
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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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-$0.03 per minute for their cellular phones.
It doesn't really tell us much to see a per month cost break down without looking at all of these other factors. In any case if you want to copy something from the rest of the world regarding wireless business models I would look at copying the concept of unlocked phones that are separate from contracts long before I'd look at copying their rate plans. I rather like to be able to call my friends who have cell phones without paying a penalty for doing so.
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We are the United States Government! We don't do that sort of thing.
You'd be wrong. The average population density in Finland is half that of the U.S. The U.S. has, on average, 31 people per square km; FInland has, on average, 16 people per square km. This according to Google. The total size of the area to cover shouldn't be relevant assuming similar percentages of the population use the service. Besides, the U.S. cell providers leave large swaths of the U.S. uncovered anyway....
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I have my bill down to 35$ 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.
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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.
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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.
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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!"
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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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.
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.
Russia: 17,075,400 km^2. Population density: 8.3/km^2
Phone plans: still cheaper than in the US.
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
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!
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.