@yank368: Here in Sweden I have a plan that costs $40, and it includes unlimited calls to all people in the same network and to landlines, $0.09/min to the rest with the ability to use $25 worth of services (calls, surfing + mail, SMS, etc). The $15 that remain are because I've bought a Nokia N97 when I signed för the plan to be paid in 24 months...

Are you kidding, is the report for real? Come on we have the cutting edge?

On the "high" side from what I remember 6 months ago on Vodafone:
16GB Iphone - $1200 with no plan, $399 with a wonderful plan like this one --> $250/month (NOTHING unlimited, not even close, not data, not txt, not voice)

I'm happy to pay the prices here in America now. :) Only big difference is a lot of places overseas don't charge you minutes for incoming calls like here in the States.

As far as quality of service, it's excellent.

I have an iPhone and pay $40/month. Free iPhone 3G 16GB, 300 minutes and 300 texts, unlimited data. Contract for 2 years.

In the US the logic is that the owner of the cell phone is paying for the use of the air interface. People who fail to understand this make the false claim that you are paying to receive calls. You are paying for air time, in or out. Inbound calls will eat your airtime, but nothing more. Outbound calls can carry costs beyond airtime.

In any case, the drive against charged long-distance in the US should tell you that the caller-pays model would sink. Based on the old long-distance rates, calls I routinely make from my cell phone while at home would more than triple my bill if billed on those old rates. My cell phone costs less than my old land-line base rate. On that line calling more than a few miles away in any direction brought per-minute costs that discouraged any but vital conversation.

If cell numbers cost me extra to call, they would be critical-calls-only stuff.

As an aside, AT&T needs to get a clue on international calling. I can call half the planet at no per-minute charge from my home phone (not an AT&T line), but if I take my cell phone into Canada, ZING! 79 cents/minute. I bought a Canadian pre-paid SIM.

WTF?

avg. AT&T iPhone plan=$100/mo x 12 mo = approx $1200/year (blows the "average" out of the water)

It's basically the caller pays. People never have to pay for incoming texts or calls (so also no minutes deducted). On most cell plans there's no extra charge to call another cell, it's just deducted from your minutes.

It just costs a little extra to call from a landline, but those aren't really high prices either and hardly anyone uses a landline anymore in the Netherlands.

When I was visiting the US for a while I bought a cheap pay-as-you-go phone so I could call my boyfriend or friends if needed. My boyfriend called me twice and I got someone who dialed a wrong number. I wanted to send a text later and found out my minutes were gone. From being called! I was baffled. It makes so much more sense that the person making and initiating the phone call has to pay.

maybe they mean by having 3G and not EDGE and coming to 4G. really in handsets we suck except for the iPhone

Canada - got the cheapest phone available, $60, plus a two year contract with a $25 plan that came out to $40 a month after all the stupid taxes and fees. (not to mention that I signed a new contract to get a discount on a new phone, and they ended up charging me a "new contract fee" so I basically ended up getting trapped into a two year contract to save like $20 bucks) That didn't include text messaging and incoming calls were deducted from my monthly minutes. Don't even get me started on the whole paying-for-incoming-SMS bullshit.

I lived in France - pay as you go, phone couldn't have been more than 50E (it was in 2007, don't remember exactly) and I bought 25E of credit every 6-8 weeks. Occasionally they would send me a text saying that any SMS I sent that day would be free.

In Korea - One year contract - Paid 50 bucks for the phone. Monthly charge is around 20-25 bucks a month depending on usage. No charge for incoming calls or SMS.

I think you all are ignoring one important factor. in Europe it generally costs money to call a cell phone, just like a toll call in the US once was. In effect they are only paying for one direction of service.

@pecan 3.14159265: Bahahahahah
Thats +1

Check with your HR dept to see if your company has a discount with a carrier- ours has a 15% discount with one provider. Then- make friends! We have 4 cell phones with unlimited text, 700 shared minutes and no internet for a total of $100 a month. That is $25 a phone and we just watch the minutes but..... because of M2M promotions and night freebies we have NEVER come close to that 700 minute cap. I can access the internet if I absolutely have to. I've only done it once- I was driving cross country and the sky was really black with these strange twisting clouds. When it comes to impending death, I stop squeezing the pennies!

While 90% of the population is clustered around urban areas, a large percentage of the country has cell coverage as you can see with Verizon's coverage map:

[www.verizonwireless.com]

Look at Kansas for example. The state is sparsely populated but nearly the whole thing has coverage. So while 90% of the population may only use several thousand square miles of network, all of the users combined have to equally share the cost of the entire network.

I'm not saying that cell phone providers aren't ripping off consumers in some ways... but the price difference between the US and other countries is a bit more complicated than simple gouging.

If you read the study (which admittedly is hard to locate), you'll find that the highest volume plan was for about 2 hours 20 minutes per month of time on the phone. 140 minutes. No free nights/weekends/in-network. Also, you pay extra if calling land line-to-mobile or mobile-to-land line.

I'm not saying that "all you can eat" is a good way to go, but if you priced 500 minutes prime time, plus another 300 minutes on weekends and 300 minutes at night, our plans would look very competitive.

You are charged for a text message whether or not you actually view the message itself.

Ok, so NOW it's:
Life
Liberty
Pursuit of Happiness
"free" education
"free" healthcare
"free" cellphone
car in every garage
chicken in every pot

Then it's settled.
/sarcasm

@bohemian: I'm pretty sure you're not required to open the text messages. If you just delete it without opening, I don't think you get charged.

I love prepaid, though. It keeps phone use and costs low, and you never have to be "that guy/girl" who's always on the phone just because they have the minutes to burn. With an unlocked GSM phone, it's also easy to jump from MVNO to MVNO to chase the lowest rates.

There are many good reasons why their system is better than ours, it's newer, it covers a much smaller footprint, it is also the only telecommunication system in more remote areas. That being said...

I was at a meeting for telecommunications professionals in 1997 when the president for the Time warner division of the Mid-South (TN,AR & MS) stated that their goal was to have bills at over $100/month within 10 years - turns out it only took them 5. Only slightly behind them was the cellular group. The average bill for a family greatly exceeds $100/ month now wouldn't you say?

I wouldn't mind it so much if our tech was the bleeding edge but it's so not.

I bought my phone, new, for $10. I pay $20 every 3 months and as long as I do that, my money stays there...it does not get lost in "you didn't use it you lose it" land. Right now, I have about $50 hanging in my account and I don't have to buy again until November.

Now, the only problem is getting people to quit asking me for my cell phone number. When I say I don't have one, I sure get strange looks!

One of the things that makes mobile phone investments so damn sexy is that the investment in fixed assets generally correlates to the number of subscribers (and therefore, the revenues).

If the US had a "universal coverage" law -- then they'd be at a disadvantage, but that isn't the case.

Blaming capitalism for the cell phone market sounds just as stupid as all the people calling Obama a socialist. It's ignorant of what the term really means.

I don't follow most of the rest of your points. Foreign markets are usually cheaper because they don't subsidize phones as part of the cost, and they don't subsidize new phones every few years like the US companies do. The carriers do differentiate on phone types and not just colors - that's why I can't get an iPhone on my provider.

And I'm confused about your Verizon vs Tracfone point. Sounds like you've got the market choice thing down pretty well if you found an equivalent service for a lower cost. But 1) I doubt they're "equivalent and 2) if everyone flocked to Tracfone, they'd have to raise rates due to basic supply and demand.

There's two separate markets here, to be clear:
1. Phone creators
2. Service providers

The Phone Creator market is pretty free. There aren't many regulations besides basic safety and wireless interference that the products have to adhere to.

The Service Provider market is not free. It costs a ton to enter. There are a ton of coverage regulations, quality regulations, and safety regulations. Thus, there's a large barrier to entry and the entire system is not "free".

"Capitalism creates choice that you get to make." What choices? The choice to pay an absurdly high price or just have no cell phone at all?

*This post was not against capitalism at all, but to suggest that a free market without rules will work is just wrong.

The carriers can't differentiate on much besides what color they're using on the back of a Blackberry, or whether the color of the Samsung phone is Cobalt Blue or Cherry Red. And whether the icons are large and cheery, or small and sedate. They're not like movie studies that differentiate on product. They can't. So they promise us the best coverage or the fastest network.

Why should I pay $100 a month for Verizon Wireless service when I can get it for about $20 a month from Tracfone? Tracfone uses the Verizon Wireless network--even their voicemail system. That's capitalism. at work.

If the cell carriers really had to compete instead of merging with smaller carriers to eek out smaller gains we'd have cheaper phones, better coverage, more affordable service. Oh, but Capitalism gives us such great choice that we're so far behind the rest of the world in choice, service, and hardware.

@chris_d: If I leave my house without my cell phone, I feel a sense of panic.

@supercereal: From the brief article on Wikipedia, I infer that the market is illegal, however it isn't as if China is quick to do anything about it. Apple has, however, brought up legality in regards to the Sciphone. I think in general, China, having its finger in pretty much all aspects of business, is turning a blind eye to the piracy and knockoff market.

I wish the iPhone could go prepaid. We don't use even half of the minutes we have, but we are on the lowest plan. I love my phone though.

@Thrashy supports the banned CSRs: That's socialism and I'm opposed to it. We just need more competition. We deregulated the telecommunications industry in 1996 and look how much cheaper everything is now....oh, wait.

@katstermonster: That's right paying more for things is a symbol of our freedom...or something like that.

@katstermonster: It is. They standardized the towers and signal types and the government even owns some of those towers. So, yes, the government decided it was in the best interest of its people to have a European mobile phone standard so that they could interoperate easier.

Sorry, but I'll take my $70 a month cell phone with messaging and data, on a reliable network, versus some lame 100 minute voice only plan for $10.

@Radi0logy: If you have to have the newest phone as soon as it comes out, then you'll shell out big bucks. Still, my prepaid phone is an LG Shine (which I think came out less than a year ago) and I purchased it new and unlocked for about $100. Not too much more than you would have paid if it were subsidized from the carrier.

The government has so many regulations around who can operate a mobile company, like coverage requirements, forced sharing of equipment, etc. The barriers to entry are steep, both from a capital perspective and from a regulatory perspective. A free market would mean I could start my own company immediately to undercut these phone providers or provide a slightly different service that draws in users.

But, keep telling yourself that capitalism is bad. Market choice is what motivates companies like Apple to create phones like the iPhone. Capitalism innovates because it wants to draw money away from other competitors. Government doesn't innovate, it tries to create massive scale, so you'd likely get just a few government created phones that have the features the most people want instead of new features that innovate the market. Capitalism creates choice that you get to make. Government creates systems that you don't get to choose, you just get to use.

TV, 10Mb cable broadband, landline and mobile = 40GBP/mth
including tax. Which is about 66USD/mth.

TV, 12Mb cable broadband and digital voice = 130USD/mth
And at least 40USD/mth for mobile. Excluding tax.

On the other end of the scale...iPhone GS 32Gb costs 175GBP (290USD) vs 299USD.

@Outrun1986: " If I could find a prepaid phone that gave me 30 min or an hour a year without the min expiring I would be a happy person!"

Try Virgin Mobile. I'm pretty sure if you buy $100 worth of minutes it won't expire for a year. You can get a cheap phone from them for less than $50, if you're willing to buy a refurb phone you can get them for as low as $20. Realisitally there's not a cheaper way to have a cell phone.

If they separated the costs of the phone out of the plans we would have at least the choice of keeping the phone longer to save money. I bet the prices of phones would actually go down too.

[www.ctia.org]

Per minute, we're cheaper than all of the OECD countries. Bogus report, and bogus news item.

Just as Obama has nationalized GM, Wall Street, and healthcare, Obama needs to nationalize AT&T. We need to "reset" back to the good old days of when AT&T was the monopoly phone company, but this time make it a government agency, ala the Post Office.

Then, an iPhone will cost just $10 per month with unlimited talk and data. Won't that be awesome? Nevermind that your taxes will be 70% or a FDR-era 90%.

@rpm773: A ton of people have Blackberries too. Basically, the smartphone market has taken off here, and there is a lot more money involved in running data for them.

[And most - if not all - CDMA operators have subsidized/free handsets with their contracts.]

You can also buy a stolen cell phone off a dude in a back alley here in the U.S. -- voila! No contract! Good stuff. Until the popo come knocking on your door at 3am.

compared to who?. with mobile TV and 12Mbps 4G Japan sure kicks our a$$es

even Rodgers in Canada is beginning to adopt that. AT&T and Verizon won't bring it out until 2011

@Mint137: But isn't the clone market illegal?

@bohemian: I know- I always forget that when I call people in the US and Canada- and I can't figure out why they're so stressed and trying to get off the phone.
Also-long distance- I don't know how it works by you, but I can dial directly through my long-distance carrier, the same way I do at my house and I get the same rate through my cell phone!

What irks me is that you can't reject incoming text messages. I can't stand it when people send you unsolicited text videos and pics. We get dinged for a hefty fee every time they do that and you can't block it. I really have no interest in paying 50 cents or more for someone I barely know to send me some supposedly funny picture.

@Radi0logy: Yeah the 200 free minutes is great- my husband and I try to use the cellphones to talk to each other during the day- it's cheaper than anything else and we almost never use the minutes up.
We also pay the equivalent of about 3.50 for a plan, which gives us a really cheap rate- I think it's about 8 cents a minute to land lines, 5 within our network and 15 to phones of other carriers.
Oh-we pay about 3.50 for the first phone (monthly over 36 months), we get that back in minutes and the second phone is free!

I couple years ago I travelled from Budapest to Amsterdam via river boat and even in the most rural area I had perfect coverage.

That $500 dollars, extrapolated over a 2 year contract, would cost about $20 per month. Factor that in and your rates are probably going to be much more in line with what you see here.

Hmmm all of that unlimited stuff would cost you at least $1,300 in the US, Maybe closer to $1,500+ (not sure how to factor in the roaming.

Yeah, but it's easiest when it's true.

Note: The existing mobile basket methodology does not include discounted or free calls to pre-selected phone numbers as part of "friends and family" or "preferred numbers" plans. The inclusion of these calls will be considered as part of a future update of the mobile basket methodology. Pre-paid plans are excluded.

That means calls from Verizon customers to other Verizon customers -- which are free, aren't they -- aren't counted. Also, the tens of millions of people who use prepaid plans, like me, aren't counted.

Also, neither the report nor the article summarizing it, mention government subsidies or rules.

@GuinevereRucker: Sorry,I should have mentioned that I'm in the Middle East. I was just trying to point out that these cheap plans are not necessarily pre-paid. That's the type of plan they're always advertising around here.
My father (in Canada) is always astounded by how cheap our phones are and I always forget that he has to pay when we call him! Crazy!

Perhaps we could trim the costs a bit by removing useless features that no one uses.

I am definitely one of the people who doesn't need a cell phone, thankfully, since I don't care to give $60 a month for something that I would hardly use because that money really can add up over a long period of time. It may not seem like a lot of money but when you look at how much it costs you per year or for 2 years to own a cell phone its completely ridiculous. If I could find a prepaid phone that gave me 30 min or an hour a year without the min expiring I would be a happy person!

[en.wikipedia.org]

The countries don't subsidize the cost of the phones, and neither, really, do the carriers. You do, by paying higher than average rates for service.

(Besides, it's not like the US HAS decent rural service. Maybe they could bitch about higher infrastructure costs due to lower population density if those of us in the low population density parts of the country HAD SERVICE THAT DIDN'T SUCK!)

@yank368: Our (very cheap plan) includes the phone. Technically we pay a monthly fee for it, but we get that back in minutes. Our phone bill is usually about 12 dollars a month and that includes two phones

Then it's about ~$.40 a minute (they bill by every 30 seconds, so $.20-ish per 30 seconds).

Video calling's ~$.40/30 seconds, and data's about $0.02/KB.

@Radi0logy: My plan is actually cheaper than that- about 12 dollars for two phones. That includes purchasing the phones over 36 months.
We don't pay for incoming calls. We also have 200 free minutes from each phone to the other per month.
We don't use text messages or internet-our choice.
Our bills can get as high as 35 dollars (for both phones) if we talk on the cell phone all the time-but we try not to.

@chris_d: Clearly, you're one of the people who doesn't need a cell phone. But you can hardly say that people want to carry a phone because you think they want to feel important - I'd like to see some numbers on how people in the US are disconnecting themselves from landlines vs. how Europe is disconnecting itself from landlines. Is it comparable? I have no idea.

What you don't get free text messages to people in your network, oh right they do that abroad. You don't have true 3G speeds if you can even get 3g at all, come on in Manhattan this shouldn't be too hard. But hey we should pay for the privilege to receive calls and texts because we live in America, wow thanks for that privilege.

Not to mention, they only have to have one set of towers in an area, since they all standardized on the same tech a decade ago. We apparently don't want to do that for cell phones, even though we do for TV, regular telephones, and Internet.

That's the excuse I've heard from Canada Post anyway. I assume the same would hold true for Cell Phones, Internet, etc.

@TinkishDelight: I think we could cut out texting entirely, but we do text a lot, and that unlimited plan comes in handy. But in any case, our bill is pretty expensive because two of us have iPhones and we both love to check our e-mail. Either we have to cut out texting entirely or keep it as is, because two individual texting plans equals one family texting plan. The real ripoff is how AT&T doesn't have a family data plan for the iPhone.

My solution to this for light users is a prepaid per-minute plan from t-mobile, page plus, or airvoice. (I know there's a few others... those are the ones that came to mind).

The other reason it's so expensive here is that dumb will pay for it. As more and more people get these things, the more I realize that people have nothing to talk about, but seem to want to be on a cell phone just because it makes them feel important or something. I don't use mine much anymore and sometimes I don't even carry it (WHAT?). The last time I left the house without it, I felt a sense or freedom.

Oi. That average is lower than mine and that's AFTER I cut down on a lot of extras on my bill. I have the old iPhone cheapest package (400 mins, free nights and weekends, 200 txts included and unlimited data) and that brings me in around $68 and that's with sacraficing a lot (I make friends send emails instead of texts).

</mindcontrol>

@Mint137: But how many people in China have cell phones vs. people in the US with cell phones? I'm not sure the extremely rural groups in China have cell phones when they live on pennies a day. China's population may be bigger, but their population of cell phone owners may be smaller than the US.

Okay, I'll stop now, I promise. :)

@Radi0logy: Yeah, though presumably because plans in Europe are cheaper than plans in the US, the pre-paid plans in Europe would be cheaper than the ones in the US as well.

@astraelraen: from my understanding, they use cell phone satellites in Europe, as opposed to the cell phone towers we use here, so infrastructure-wise it's apples and oranges. apparently the satellites are much cheaper to operate in the long term, and supposedly you don't have dead zones like you do if your tower is on the other side of a mountain.

This whole "America is less dense than europe or asia" meme has got to die.

90% of the population is clustered around dense urban areas.

The area of the east coast between Boston and Washington DC is as very similar, population wise, to the entire country of Japan.

So why the hell can't I get decent internet service or cell phone service in midtown Manhattan?

We live in the Middle East. We have a really great plan, but essentially, we pay about 12 dollars a month for *two* cellphones.
We chose not to text or have acess to internet on them.
It's about 3.50 per month for the first phone (that's the price to buy the phone-per month over 36 months) We get that 3.50 back in minutes. The second phone is free.
We pay about 4 dollars for a really cheap plan and the rest is minutes.
Granted, we have pretty cheap bills, because we're careful, but it's pretty normal to have 20-30 dollar bills here, (for one phone) even if you use it a lot more than us.

@Radi0logy: I'm guessing they're including pre-paid phone plans where you purchase minutes, and could feasibly spend as little as $11.50?

I'm going to go out on a limb and state that maybe, just maybe US carriers have a larger fixed asset cost due to the fact that our country is significantly larger than most others.

I'm not sure if Europe has a large unified carrier that would have a similar fixed asset cost to cover the entire continent like the US does.

/sarcasm

AND, most other countries do not subsidize the price of the phone, so we get free phones, and other places have to buy them outright. I bet that is not factored into the math.

Much like American appetites, we like our cell plans to be "all you can eat" unlike other countries where they pay for small bits.