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August 12, 2009 4:24 PM

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$11.50 a month for cell phone service? I want to know more about how that compares to what I get with mine

7 replies

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sufferd

August 14, 2009 3:39 AM

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@Radi0logy: I'm from the Netherlands: $11.50 gets you the cheapest plan available. $0.14 a minute for the first 100 minutes, $0.32 after that. Texts also $0.32, but you don't pay for incoming calls or texts. Contract for 2 years and you get a free phone.

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

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eddieck

August 12, 2009 6:45 PM

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@Radi0logy: There actually is a company I've seen on late night TV called Consumer Cellular. (Late night TV probably hints that it's bogus.) They appear to be an MVNO reselling what looks to be AT&T.

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.

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Samby

August 12, 2009 4:57 PM

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@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.

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GuinevereRucker

August 12, 2009 4:59 PM

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@Samby: How'd you get that plan? I would drop Verizon like a big spider if I could find a deal like that.

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Samby

August 12, 2009 5:03 PM

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@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!

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bohemian

August 12, 2009 5:28 PM

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@Samby: That was the other odd thing I noticed in this study. People in other countries don't have to pay for incoming calls. Someone needs to smack down the US cell phone industry.

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MikeVx

August 14, 2009 3:19 AM

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@bohemian: In the other countries you mention the callers are paying for the airtime on the call. Cell phones are isolated into special prefixes so that you know you're going to be dinged a hefty per-minute surcharge when you dial it.

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.

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Samby

August 12, 2009 5:32 PM

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@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!

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August 12, 2009 5:09 PM

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@Samby: Sounds pretty good but I'm confused about one thing - you say you get 200 minutes from each phone to the other one? So you can just call the other phone, like a walkie-talkie? What is your per minute rate if you call another number?

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Samby

August 12, 2009 5:23 PM

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@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!

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pecan 3.14159265

August 12, 2009 4:31 PM

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

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Mint137

August 12, 2009 4:41 PM

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@pecan 3.14159265: Some countries actually use more pay as you go plans than the allowance system. Think about it, if I pay for 1000 minutes but don't use it all for one month, but then use it all another month, the company still gets the same amount of cash even if we don't use our share of the network. The prepaid plan rounds out to being more fair by being an actual usage based plan like water.

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August 12, 2009 6:28 PM

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@Mint137: The wife and I used to have contract phones here in the UK. Was costing us £40/month for far more inclusive minutes than we ever used. We moved to PAYG and spend less than a tenner a month now - and that's for three phones now our 12 year old has one.

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August 12, 2009 5:31 PM

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@Mint137: Based on research I've been seeing, increasingly people in Europe actually own 2 phones - one on a plan for inside their home country, and one pre-paid for traveling internationally but within Europe.

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August 12, 2009 4:58 PM

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@Radi0logy: Softbank Japan has the \"White Plan\" for about 980 yen a month. That's about ~$10.50 US. No minutes at all and unlimited SB to SB from 1 AM to 9 PM each day for free.

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.

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bohemian

August 12, 2009 5:27 PM

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@dragon:ONE: Softbank Japan needs to move into the US market. I would drop Verizon like a bad habit.

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Antiks

August 14, 2009 11:56 AM

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@bohemian: I've always been happy with Verizon. We have an expensive plan, but don't need it. That reminds me, I need to bring this up with my wife again.

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

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August 12, 2009 7:08 PM

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@bohemian: I've been saying the same thing- they also have insanely cool phones too.

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August 12, 2009 4:36 PM

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@pecan 3.14159265: But I thought you could do that here too, if you really wanted to.

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pecan 3.14159265

August 12, 2009 4:39 PM

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@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.

","

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August 12, 2009 4:26 PM

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

4 replies

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Grrrrrrr, now with two buns made of bacon.

August 12, 2009 11:38 PM

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@RandomHookup: Somebody could clean up if they offered a $20 a month low-usage plan for those of us who don't need a phone plastered to our ear every waking minute of the day.

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rushevents

August 12, 2009 7:35 PM

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@RandomHookup: Not so in asia whose system (especially in S. Korea) is light years ahead of ours.

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.

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August 12, 2009 4:50 PM

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@RandomHookup: Funny thing though, Pretty much only the 4 big US carriers charge you for incoming texts, and calls. (US Cellular doesn't, but they are one more rung down below the 4). So a 400 Minute plan in Europe is the same as an 800 minute plan here...

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.

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bohemian

August 12, 2009 5:31 PM

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@QuantumRiff: We have the smallest plan available on Verizon and it is still about $80 a month for two phones to use one pool of minutes.

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.

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almk

August 14, 2009 2:28 AM

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@bohemian: Ditto. We tried looking around for a plan with less minutes, since we have cell phones *exclusively* (no land lines) and we still only use half of our minutes each month. There simply aren't any plans that offer less than 700 minutes a month. We even looked into pay-as-you-go services, but they charge a fee every day you use the phones and would be even more expensive than our family share plan.

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August 13, 2009 2:46 AM

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@bohemian: My sister and her husband have Verizon, and have blocked text and picture messages, as far as I know. You might try talking to Verizon about it again, because I believe it can be done.

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Trai_Dep

August 12, 2009 8:17 PM

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@bohemian: I have Verizon and a non-rich cell phone with TXTing (etc) off, and I don't get charged. You might want to investigate.

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lilyHaze

August 12, 2009 7:55 PM

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@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.

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azntg

August 12, 2009 9:54 PM

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@lilyHaze: Unfortunately, that's a misconception.

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

","

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yank368

August 12, 2009 4:26 PM

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But I thought Canada pays more than us. AND they have 3 year contracts.

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.

9 replies

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sackese

August 15, 2009 6:30 PM

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@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...

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Englishee Teacher

August 13, 2009 5:19 AM

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@yank368: yeah.... we CAN have three year contracts... but you can choose 1, 2, or 3 year contracts to get more of a discount on your phone. Still much more expensive than abroad though.

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.

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lmarconi

August 14, 2009 1:49 PM

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@Englishee Teacher:
Then again, I lived in Europe for a year and I had a great experience with cell phone service there. I'm not someone who wants a lot of bells and whistles - I like to make phone calls and occasionally text and I don't really care what my phone is like. I was on a pay as you go plan offered by Orange, which is one of the big cell phone companies in the UK and France. My cell worked all over Europe without having to talk to customer service or change anything and the charges weren't enormous. The pay as you go service was set up so that you had a number of plans to choose from based on what you do the most - I did a lot of international calling so I had a plan where they were just a few pence per minute - made Skype unnecessary even. Other options were for very cheap unlimited texting, etc. based on usage. And for those who argue you pay more for the phone because the service is cheap - not really. I'm sure you do if you want a phone that does everything under the sun, but I had a phone that was maybe a little lesser quality than the free one I got from Verizon in the US and it cost 10 pounds (about 15 US dollars when I was there).
US conservative pundits may argue that UK infrastructure and healthcare is \"socialist,\" but from my experience, bring it on since it's a hell of a lot more efficient than what we've got here. Well, excluding Parliament, which seems to be just as scandalous as Congress lately.

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August 12, 2009 7:12 PM

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@yank368: Plenty of other countries do. And in China, even the prepaid phones are subsidized- you can pay US$30-some for a cheap Nokia with about US$40 of credit pre-loaded. At about US$.03/2 minutes or texts that's only for a couple of months.

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August 12, 2009 6:52 PM

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@yank368: Having lived and had cell phones in both Canada and the U.S., I am pretty sure Canadians do pay more. Things get particularly nasty when it comes to roaming and long distance. The U.S. has better all in packages.

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trolley

August 12, 2009 5:05 PM

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@yank368: We do pay a lot in Canada, but you missed the point of the article. Canada and the US are 2 of the top 3 in price. Why does it matter which one is higher?

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Sir Winston Thriller

August 12, 2009 5:00 PM

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@yank368: \"most other countries do not subsidize the price of the phone, so we get free phones\"

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.

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frank64

August 12, 2009 6:15 PM

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@Sir Winston Thriller: And if you keep the phone longer than 2 years, your rate should go down because the phones is paid for. Of course it doesn't.

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.

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Samby

August 12, 2009 4:58 PM

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@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

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August 12, 2009 4:26 PM

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It must be...SOCIALISM!!!

/sarcasm

1 replies

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ARP

August 12, 2009 6:46 PM

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@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.

","

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astraelraen

August 12, 2009 4:28 PM

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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.

12 replies

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ndonahue

August 12, 2009 7:31 PM

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@astraelraen: Good idea, but probably not a factor in this.

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.

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August 12, 2009 7:16 PM

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@astraelraen: That argument holds no water until the carriers actually bother to cover the whole country.

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August 12, 2009 4:37 PM

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@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.

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bohemian

August 12, 2009 5:33 PM

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@craptastico: If they are cheaper and better why do US carriers not use them?

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August 12, 2009 4:45 PM

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@craptastico: Are you talking about some type of satellite besides the ones in orbit above earth's atmosphere? Because if you're talking about the ones in orbit, you're wrong. Satellite phones do exist, but they are not common and they're certainly not the GSM phones that are ubiquitous in Europe. GSM phones are short-range devices designed to communicate with ground-based cell antennas. now, they may not be on dedicated towers (as many such antennas are in the US) they might be mounted on buildings, billboards, utility structures, etc... but they're not in orbit around the Earth.

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chris_d

August 12, 2009 4:37 PM

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@astraelraen:
I've seen this discussed several times with posters suggesting that several countries in Europe have similar population density to the U.S. yet have lower rates. I believe Finland and Sweden were mentioned.

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Eyebrows McGee (now with more baby!)

August 12, 2009 4:59 PM

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@chris_d: Yeah, my dad used to work in cell infrastructure in the 90s and in the Scandinavian countries they were putting up cell towers in the sparsely-populated far north in places where they'd never even HAD phone service because the lines cost too much to run. It's an expensive infrastructure, and they still pay considerably less than we do.

(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!)

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sbcpunkrocker

August 12, 2009 4:37 PM

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@astraelraen: Or it could be that we get hosed, just like with healthcare, education, etc. costs

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Mint137

August 12, 2009 4:35 PM

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@astraelraen: I counter with the fact that China has cheaper service, and is a larger country with more people to serve. The US cellphone companies are clearly artificial.

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Jetts

August 12, 2009 4:48 PM

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@Mint137: But, because of China's large population, the cost of the cell infrastructure per phone user is lower. The population density offsets the increased cost due to the size of the country. Big areas and smaller, spread out populations are what make it more expensive.

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

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Mint137

August 12, 2009 4:56 PM

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@Jetts: Cells have a max capacity. Urban areas will produce more load and require more towers to be built where building and other such things exist. The density actually increases demand and infrastructure cost. Rural areas are a problem for all countries: China and USA both have dense and sparse areas.
It is not the same as post. After laying down a wire, the cost to continue using that wire is only to maintain it. Post requires you to pay someone to drive out into rural areas: gas, wages, vehicle maintenance. The analogy doesn't apply correctly in this case.

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pecan 3.14159265

August 12, 2009 4:41 PM

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@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.

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August 12, 2009 5:56 PM

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@pecan 3.14159265: India, which is fairly big, and has very poor infrastructure for traditional utilities, has a huge number of cellphone users and yet the services are cheap. Sure, they pay for the cellphones, but the same phone I have here is sold there for 30-40 bucks. And back when I used it, it cost me hardly 10 bucks a month. And it had free incoming calls, free incoming messages, and free calls and messages within the network.

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

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August 12, 2009 5:36 PM

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@pecan 3.14159265: According to eMarketer, 625 Million mobile subscriptions in China (80% penetration), 308 Million in US (97% penetration).

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August 12, 2009 5:03 PM

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@pecan 3.14159265: Actually, China leads the world in cell phone consumption with 679 million mobile phones in use, roughly half of their population. The U.S. has a higher percentage, at 88%, but a much lower quantity of just 271 million out of 306 million peoples.

[en.wikipedia.org]

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Mint137

August 12, 2009 4:48 PM

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@pecan 3.14159265: When the population is a whole magnitude larger than the US, I don't believe the fraction of cell phone owners would be smaller. Also, the clone market produces VERY cheap phones, and as I said the main plans are all prepaid, meaning low usage will be reflected. It is very easy for the majority of China's population to own a cellphone these days. Based on this I'd have to say China definitely has a larger cellphone owner population.

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August 12, 2009 4:40 PM

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@Mint137: But China is Communist! If we have cheap cell phone service, we'll be...COMMUNIST!

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

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ARP

August 12, 2009 6:47 PM

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

","","

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Mint137

August 12, 2009 4:34 PM

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It is true and sad. I'm out of country right now, in China, and they pay a fraction of what we have to for cellphone use. China has a much larger population compared to the US, so the whole idea of \"larger capacity\" and \"better coverage\" being the price we pay, not justified.

3 replies

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August 12, 2009 5:14 PM

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@Mint137: I think you're missing one important factor - In China, since you just buy a prepaid card to use the phone, you have to shell out big bucks to get a phone. I remember seeing the Samsung Instinct over there when it just came out and it was over $500 (dollars not RMB, I guess it would have been about 4000 RMB at the time), with no option to defer that over the cost of a contract.

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.

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August 12, 2009 7:19 PM

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@Radi0logy: ...Where were YOU looking? If you actually headed into a carrier shop you would have had the option of putting it on contract for a discount. And unlike America the subsidy grows the bigger the plan you put it on. But to prevent you from signing up for a big plan and switching to a smaller one they put a minimum spending cap on your account for the duration of the contract- if you don't spend that much they'll ding you for the difference anyway since it was in the contract.

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August 12, 2009 7:36 PM

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@jamar0303: All over the place - BUT - I can't read Chinese so maybe theres mo there that I didn't see. Regardless, I'm 99% sure the OP is talking about the scenario I'm talking about

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August 13, 2009 2:12 AM

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@Radi0logy: Hmmm, something seems odd there. At the carrier shops (China Mobile, China Unicom, or China Telecom) a phone will usually have 4 price tags. 3 of them will have numbers next to them denoting the \"minimum payment\" each month (for two years, just like America) required to get that price. The fourth will be the \"no subsidy\" price. Of course, even if you did see that, fat lot of good it would do because you need a local ID to sign up.

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Mint137

August 12, 2009 5:32 PM

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@Radi0logy: The thing is, the majority of people in China don't care for buying $500USD phones. The clone market is HUGE in China, with phones being close to $50USD at times. So in reality, those phones just don't sell well in China.

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August 12, 2009 7:21 PM

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@Mint137: You'd be surprised. There's also a healthy-ish market for imported Japanese phones, even though Chinese text input on most of those is clunky at best.

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August 12, 2009 5:46 PM

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@Mint137: Chinese don't buy legitimate legal copies of DVD's either, preferring to buy copies (although impressively well done copies!!) for around $1 (7 rmb) each. Just because China doesn't have the intent or resources to clamp down on the illegal market does not position it as a viable alternative.

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.

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pecan 3.14159265

August 12, 2009 5:40 PM

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

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August 13, 2009 2:56 AM

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@pecan 3.14159265: Bahahahahah
Thats +1

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August 12, 2009 6:44 PM

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@pecan 3.14159265: I don't know if it is. Sciphone is a very well known and \"reputable\" iPhone knockoff company. I've seen their sciPhones reviewed on major gadget sites, major phone sites, and major marketplaces (you can buy them off Amazon, from Amazon I think).

@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.

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pecan 3.14159265

August 12, 2009 6:57 PM

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@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.

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August 12, 2009 7:50 PM

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@pecan 3.14159265: I've been looking at getting an iPhone on prepaid, and as far as I know, there aren't any issues in doing so. Of course you'd have to buy it unsubsidized from a third party (anywhere from $250 for the 1st gen -$1100 for 3Gs [who in their right mind pays $100 for a phone?!] on eBay), and you'd only get voice and SMS (or limited web if you throw it on TMobile prepaid...I don't think any AT&T prepaid MVNOs offer web).

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.

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Samby

August 12, 2009 4:35 PM

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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.

1 replies

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August 14, 2009 4:08 PM

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@Samby: I'm thinking that 30 dollar bill is probably fake...

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Thrashy

August 12, 2009 4:37 PM

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This is hardly new. American telcos have raised gouging their customers to a science. We pay more for basic telephone service. We pay more for Internet service. It's not suprising that we pay through the nose for cell phone service as well. The FCC, and probably the FTC too, need to do more to put the fear of God into the telephone/ISP/cell phone industry.

2 replies

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ARP

August 12, 2009 6:53 PM

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@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.

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August 13, 2009 8:34 AM

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@ARP: :)

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dequeued

August 12, 2009 4:37 PM

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@astraelraen
Well, you'd be wrong.

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?

3 replies

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xip

August 13, 2009 1:35 AM

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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.

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August 13, 2009 2:48 PM

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@xip: And US providers need to serve the highways and railways connecting these large cities - like I-40 from Barstow to Alburqueque.

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nygenxer

August 12, 2009 10:08 PM

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@dequeued: Quite right. Thanks for posting.

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Applekid

August 12, 2009 4:43 PM

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We're paying for all those delightful commercials that we all love so much. The ones that interrupt just about every television and radio program in existence, several times each program. I sure do love seeing how that sassy teenager will foolishly discard those old rollover minutes or how The Network will defy any attempt to discover where they aren't covering things or how pushing a button to talk instead of calling a contact will improve my life and make me head of a Fortune 10 company.

</mindcontrol>

1 replies

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August 12, 2009 4:53 PM

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@Applekid: Your also paying for that \"Free\" $300 phone that you got when you signed up. The same ones that the European customers pay about $125 cash for. They mark them up, so you think your getting a much better deal...

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August 12, 2009 4:43 PM

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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).

2 replies

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BridgetPentheus

August 12, 2009 4:52 PM

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@TinkishDelight:

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.

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pecan 3.14159265

August 12, 2009 4:46 PM

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@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.

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rpm773

August 12, 2009 4:45 PM

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Considering how popular the iPhone has been over the last few years and what the monthly nut is to run one them, the amount we pay for service doesn't seem to bother us too much.

1 replies

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pecan 3.14159265

August 12, 2009 5:58 PM

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@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.

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chris_d

August 12, 2009 4:46 PM

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One of the reasons why it's so expensive here is the built-in two year replacement cost on post-paid plans. If you don't get a new handset every two years, you're still paying the cost of one. I think it's the dumbest thing ever, because it's an environmental disaster to have all these used cell phones filled with toxic materials and a high cell phone cost. But we Americans cannot resist \"free\", even if it's not free and we're paying for it anyway; we just plug our ears and go, \"NA NA NA NA I can't hear you; it's free; it's free; I want to believe it is free, so it is!\"

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.

6 replies

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pecan 3.14159265

August 12, 2009 6:59 PM

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

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August 12, 2009 5:03 PM

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@chris_d: Another thing is a basic phone is very hard to find, you have to go with an older model and that might not work because of an older battery and other things. So we end up paying for a lot of features that we don't really use, even though a lot of people (like me) would be happy with a phone that just does phone calls and an address book with no obtrusive, confusing menus etc. How many people actually use all those features on their cell phone or even know how to use them? Yes some do but there are people who just want a simple phone out there and that seems to be unobtainable these days. There are plenty of options for the tech savvy who want a robust phone, but prepaid seems to be the only option for those who want something simple.

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!

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August 12, 2009 7:31 PM

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@Outrun1986: I have Virgin Mobile. I like it because I want to have a phone with me when I go out and about, but I don't use it to call all my friends and jibber jabber for an hour.

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!

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August 13, 2009 5:01 PM

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@dorastandpipe: Yeah this sounds like the best way to go but I had a really bad experience when trying to sign up with Virgin in the past and since I share a phone that I only use occasionally (very occasionally, like once every 2 months) its not likely I will be able to get the other person to want to switch from my 25$ a month T-mobile plan.

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pecan 3.14159265

August 12, 2009 4:53 PM

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@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.

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mizike

August 12, 2009 6:26 PM

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@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.

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chris_d

August 12, 2009 4:47 PM

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@chris_d:
Whoops... I meant sense OF freedom.

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Saboth

August 12, 2009 4:55 PM

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Kind of like how we pay more for healthcare, high speed internet and many other things.

2 replies

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Sir Winston Thriller

August 12, 2009 5:04 PM

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@Saboth: But we get freedom, with that, Saboth. And Freedom may be priceless, but there are those extra fees tacked on.

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August 12, 2009 5:19 PM

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@Sir Winston Thriller: *Batteries not included, separate charge for connecting, fee for Universal Freedom Fund, paper-bill fee, and Freedom of Speech maintenance fee*

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I Love New Jersey

August 12, 2009 4:59 PM

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You can prove anything with a study.

1 replies

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TechnoDestructo

August 12, 2009 5:06 PM

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@I Love New Jersey:

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

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August 12, 2009 5:02 PM

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blame AT&T

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August 12, 2009 5:04 PM

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Guys, you might want to read the reports, if you haven't already:

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.

3 replies

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Nytmare

August 12, 2009 5:17 PM

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@MooseOfReason: And how about the fact that handset prices are included in the usage rates in the US, which I guess amounts to a few hundred dollars?

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August 12, 2009 7:24 PM

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@nytmare: They do that in Europe, too.

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August 12, 2009 5:08 PM

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@MooseOfReason: I forgot to mention Alltel's (now Verizon's) thing where you can choose a couple people on any network to call for free, and T-Mobile's \"My Faves\".

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brianary

August 12, 2009 5:08 PM

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The invisible hand of the rational market punches us in the face, again.

4 replies

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TheFlamingoKing

August 12, 2009 6:36 PM

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@brianary: That would imply that the cell phone market is a free market, which it is not...

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.

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August 12, 2009 7:26 PM

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@TheFlamingoKing: And because of the way cellphones work, there MUST be regulation to prevent things like RF interference, deliberate or not, from occuring. Also, standardization.

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aces89

August 12, 2009 7:20 PM

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@TheFlamingoKing: But what happens when all the cell pone companies get investigated by the government for collaborating prices (text message prices)? True capitalism allows for this and allows these companies to screw the consumers in your so called free market.

\"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.

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Sir Winston Thriller

August 12, 2009 7:17 PM

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@TheFlamingoKing: Except that in countries that aren't as cutthroat capitalist as the US, cell phones are cheap, coverage is affordable, and there's innovation.

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.

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TheFlamingoKing

August 12, 2009 7:30 PM

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@Sir Winston Thriller: Again, this system isn't capitalism. It's not socialism. It's somewhere inbetween.

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\".

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August 12, 2009 7:38 PM

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@TheFlamingoKing: \"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.\"
But they do. They just don't make it the default option like it is in the US.

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August 12, 2009 5:09 PM

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Hmm... In Norway my company estimates my mobile plan is worth approximately $650/year for tax purposes (so it's counted as income). But that basically gets me unlimited calling, unlimited texting, and unlimited data. And, of course, I don't have to worry about roaming charges, whether I'm somewhere in Europe or visiting the States.

2 replies

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Saboth

August 12, 2009 5:13 PM

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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.

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August 12, 2009 5:56 PM

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@Saboth: for an iPhone that would run you $3,600 plus the cost of the handset and activation fee and whatever other crap AT&T wants to pull

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August 12, 2009 5:57 PM

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@AppleAlex: well $3,600 for 2 years but point is that's a lot. screw it I'm moving to Norway

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August 13, 2009 8:36 AM

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@AppleAlex: They have a great health care and social welfare system too. Kudos to Norway!

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katzeroo

August 12, 2009 5:11 PM

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I thought the reason for this was because the cellphones were heavily subsidized here in the states. Overseas, they pay full price, but the service is cheap and you aren't tied down to a specific provider.

1 replies

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August 12, 2009 7:27 PM

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@katzeroo: No, even overseas you have subsidies. Only in Japan is the subsidy separately itemized on the bill.

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ckaught78

August 12, 2009 5:22 PM

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

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Baccus83

August 12, 2009 5:42 PM

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Also - does any country outside of the USA allow double billing (billing for incoming and outgoing call?). I've always thought that was absolutely the most ridiculous thing.

1 replies

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August 12, 2009 7:49 PM

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@genegemperline: Yes, in Canada. Not only do you get charged the minutes, but you also get dinged for the long distance charges both ways. Rogers (probably the other carriers have something similar) has something called MY5, where you can give a list of 5 phone numbers (land or cell, and you can change one number on the list once per month) and get charged no extra money to text, send or receive calls to that number. The catch however is that the minutes and text message you spend on your MY5 count toward your overall plan minutes/texts, so you could still end up paying through the wazoo.

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August 12, 2009 5:44 PM

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cutting edge technology that's so far ahead?

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

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S-the-K

August 12, 2009 6:02 PM

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I would wager that the OECD only looked at the end user cost and ignored such things as government-owned telephone monopoly and government spending taxpayer money to subsidize the government phone monopoly, thus hiding the true cost of the cell service.

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%.

1 replies

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August 12, 2009 7:30 PM

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@S-the-K: WTF? Let's look at a nationalized cellphone company- China Telecom (it's CDMA, though). Cheap? Yes. Tax rates for China? Nowhere near 70%, let alone 90% (and it's communist, to boot- that's a pretty big hole in your preconception right there). What are you smoking to even think of something like that?

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cmdrsass

August 12, 2009 6:05 PM

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The structure of the European telecom system makes this an apples and oranges comparison, but it does nurture some American's inferiority complex when it comes to all things European.

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zarex42

August 12, 2009 6:09 PM

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It's more expensive only because Americans use much more of it:

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

2 replies

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August 12, 2009 7:33 PM

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@zarex42: Only when you start talking about unlimited or very high-usage plans. Me? When I was visiting the US, international roaming with my Chinese SIM was actually CHEAPER than getting an AT&T SIM. Mostly because my SIM gives me free incoming texts anywhere in the world and outgoing rates cheaper than AT&T's prepaid rate. Take that, AT&T!

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zarex42

August 13, 2009 7:43 PM

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@jamar0303: And part of the report indicates that Americans actually use all that extra. So for Americans, and their phone habits, it's *cheaper*!

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Trai_Dep

August 12, 2009 6:11 PM

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But those European cell phone minutes are Socialist cell phone minutes.
Our minutes are Freedom-Loving American minutes.
So there, technologically more advanced, vastly cheaper Europeans!

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August 12, 2009 6:29 PM

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It's a bit difficult to compare but...

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.

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August 12, 2009 6:56 PM

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You have to admit that the credibility of the report suffers a bit when you click on the graph to see that not all the bars are labeled because they're on an angle. If dude had right clicked over the X axis (I am assuming Excel here), \"Format Axis\" and \"Alignment\" and changed it to 90 degrees, you'd actually get to see who the top most expensive countries for wireless actually are

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August 12, 2009 7:16 PM

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When I was in Pakistan back in 2004/5 For about $20 you got 6 months free incoming calls plus 350 minutes.

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August 12, 2009 8:22 PM

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This doesn't surprise me at all I'm getting killed.

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valleygirl_18002

August 12, 2009 8:58 PM

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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

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August 12, 2009 10:06 PM

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Someone has to subsidize everyone else. For once, it can be America! WOOOOO WE'RE #1 WE'RE #1

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SoccerMania

August 12, 2009 11:23 PM

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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.

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lolagranola2000

August 13, 2009 2:28 AM

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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!

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loueloui

August 13, 2009 3:21 AM

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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.

1 replies

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Madjia

August 13, 2009 7:37 AM

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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.

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karlsl

August 13, 2009 3:29 AM

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They said the cell in the US has cutting-edge technology???? what a joke.... in Japan the consumer can use the cell to see the person they talk to, shop online, pay the bills, watch TV and even use it as the credit card!! In US, besides iPhone, majority of cell here can only make calls and text the message. how advance is that? I don't know what those cell CEOs are trying to convince.

1 replies

$\"user-pic\"$

August 13, 2009 6:23 AM

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@karlsl: same thing I say

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

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$\"user-pic\"$

August 13, 2009 8:33 AM

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Keep in mind that the standard of living in the Netherlands and Sweden is also a good margin higher than ours. Their service is actually cheaper than the numbers indicate, unless they've been adjusted.

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August 13, 2009 2:14 PM

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Shouldn't the title read: \"Congrats iPhone users, We pay the most for cellphone service\"

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

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chrylis

August 13, 2009 5:55 PM

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@craptastico: You're mistaken. Not only are satellites much more expensive to operate, there's about a half-second delay for each half of a phone call, meaning that for anything except urgent calls, it's not worth using.

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Lori5150

August 13, 2009 7:11 PM

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What would be the difference of having an unlocked phone VS a locked phone and a forced contract for two years. Almost seems backwards... Doesn't the forced contracts come from the socialist countries???

WTF?

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cptskippy

August 14, 2009 3:46 AM

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I don't doubt that we're being over charged for service (e.g. MMS, SMS, Data) and that the telephone companies have unnecessary expenses (e.g. lobbyists, huge salaries) but the cost to build out and maintain our networks and the amount of rural coverage (a loss leader) is much greater in the USA because the sheer size of our country. I would suspect that our telcos have proportionally higher labor costs that those smaller countries.

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User1357

August 14, 2009 1:43 PM

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Apparently no one from the \"Organization for Economic Cooperation and Development\" has ever lived in New Zealand.

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.

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Blaze

August 14, 2009 4:45 PM

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

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August 18, 2009 12:29 AM

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We must remember that a large part of our phone bill is, yes, taxes and fees. Not sure how that compares to other countries. Also, if we have to have internet, text messaging, cameras, music, gps, tv soaps, and all the rest on our phone, we should not mind paying for it. Why not a phone that just makes voice calls? How did we ever get along before driving while texting?

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