US Cell Phone Plans Among World's Most Expensive 827
Albanach writes "An OECD report published today has shown moderate cell phone users in the United States are paying some of the highest rates in the world . Average US plans cost $52.99 per month compared to an average of $10.95 in Finland. The full report is available only to subscribers, however Excel sheets of the raw data are available to download." (You'll find those Excel sheets — which open just fine in OpenOffice — on the summary page linked above.)
Infrastructure is part of it ... (Score:2, Informative)
The area of Finland is 131,000 square miles [joensuu.fi].
Re:Missing Data, Towers Probably Influence Cost (Score:3, Informative)
Finland has 17 inhabitants per square kilometre on average. US is at 30. I would expect that Finland has universal cell phone coverage like the other Nordic countries, but unlike the US.
It also seems quite unlikely that the US has "more harsh weather conditions than Finland".
comparing apples and oranges..... (Score:5, Informative)
In Europe (and most other regions outside of the US and Canada for that matter) the cellular user is not expected to pay the full cost of having wireless service. This is why other users who call your cell phone pay a premium for doing so and why the wireless customers over there often have free incoming calls. This is known as a "caller pays" model.
The US has (for better or worse) adopted a "subscriber pays" model wherein the wireless customer pays a higher price and for incoming minutes but those who call him and do so at the same rate as any other phone call (free in many/most cases). The US also has many perks that aren't part of most calling plans in other countries -- unlimited calling to X numbers, unlimited nights and weekends, unlimited mobile to mobile, etc, etc. Add in all of these perks and break down the monthly rate by the number of minutes used and many Americans wind up paying around $0.02-$0.03 per minute for their cellular phones.
It doesn't really tell us much to see a per month cost break down without looking at all of these other factors. In any case if you want to copy something from the rest of the world regarding wireless business models I would look at copying the concept of unlocked phones that are separate from contracts long before I'd look at copying their rate plans. I rather like to be able to call my friends who have cell phones without paying a penalty for doing so.
Re:Missing Data, Towers Probably Influence Cost (Score:4, Informative)
You'd be wrong. The average population density in Finland is half that of the U.S. The U.S. has, on average, 31 people per square km; FInland has, on average, 16 people per square km. This according to Google. The total size of the area to cover shouldn't be relevant assuming similar percentages of the population use the service. Besides, the U.S. cell providers leave large swaths of the U.S. uncovered anyway....
I have it under 50$ (Score:4, Informative)
Some other info about Finland (Score:5, Informative)
I should probably have added this when I submitted.
In these threads, there are often comments about population density in Europe making coverage more effective. Finland has a population density of 16/km2 - that's lower than Maine and 37 other US states.
Perhaps you think Finland must be tiny, in fact it's land area is 305470 sq km, that's bigger than Arizona. There are only five US states larger than Finland.
Maybe coverage is actually really poor, restricted to big cities? Take a look at this coverage map.
http://www.gsmworld.com/cgi-bin/ni_map.pl?cc=fi&net=te [gsmworld.com]
Do any US states have coverage like that?
Re:Stupid prices (Score:5, Informative)
True competition? Then why are your prices so high?
In a truly competitive market prices for comparable items converge towards a low price, as long as they aren't luxury items.
Look around in your supermarket. You can probably find ten different brands of bread, all costing roughly the same per unit of weight. The price will be fairly comparative to European prices (should be lower in the US as you have lower taxes and lower wages). That's true competition.
Not so in your cellphone market.
Re:Missing Data, Towers Probably Influence Cost (Score:4, Informative)
Well, at it's good to know we don't have a monopoly on mindless, nationalistic arrogance here in the USA. I was starting to worry. Thanks for making me feel better.
Re:Dutch second cheapest (Score:4, Informative)
Re:USA area most other countries (Score:5, Informative)
Re:comparing apples and oranges..... (Score:4, Informative)
Why you all pay so much for such mediocre service, I really don't know
Because it's a wonderful free market and we all have a choice. Oh, wait...
I live in the US but I'm British, so I know exactly what you mean. Orange wasn't great but it beat the crap out of AT&T...
Re:Stupid prices (Score:5, Informative)
A great deal of consumer relations in big business nowadays boils down to this Frederick Douglas quote:
Infrastructure buildout != higher plans (Score:2, Informative)
Finland (data from https://www.cia.gov/library/publications/the-world-factbook/geos/fi.html):
Total area: 338,145 sq km
Population: 5,250,275 (July 2009 est.)
Urbanization: urban population: 63% of total population (2008)
US (data from https://www.cia.gov/library/publications/the-world-factbook/geos/us.html):
Total area: 9,826,675 sq km
Population: 307,212,123 (July 2009 est.)
Urbanization: urban population: 82% of total population (2008)
To directly compare these two countries first we will determine the population density.
Finland = 5,250,275 people / 338,145 sq km = 15.53 people per sq. km.
US = 307,212,123 people / 9,826,675 sq km = 31.26 people per sq. km.
If the cell carriers deploy towers which cover the same area then each tower will serve almost twice as many potential US customers as Finnish customers. This is discounting that a larger percentage of the US population lives in an urban environment. It is true that a rural infrastructure build out would be more expensive per potential customer; Finland would have the higher cost to bear in this case (63% vs. the US 82% of the population).
If we use a cell tower that will cover 1 sq. km of area that would be placed in an urban zone of each country it would cover:
Finland = (63% x 5,250,275 people) / 338,145 sq km = 9.78 urban people per sq. km.
US = (82% x 307,212,123 people) / 9,826,675 sq km = 25.64 urban people per sq. km.
I don't see how the argument of infrastructure build out is the defining factor in the order of magnitude in plan pricing seen between Finland and the US.
Re:Stupid prices (Score:5, Informative)
It costs money to put up these towers.
Europe has a larger population compared to US, yet it has a lesser amount of land to cover with cell sites.
As a result, people/tower ratio is quite good in Europe and partially contributes to better plans.
We have the exact opposite here in Canada, where the population is 10 times lesser than USA and land is larger. You should look at our plans. I am paying 25$/month for 500MB, plus anoter 45$ for voice (I'm rather lucky as I have a grand fathered plan which gives me unlimmited voice).
Today, for the kind of money (about 90$/month). I would get 1000 min and 500 MB and 250 SMS.
Re:Gasoline prices are lowest in the USA (Score:3, Informative)
Fuel taxes [wikipedia.org] are dramatically higher in Europe. For example, in Norway, 63% of the price you pay at the pump is made up of taxes. In the Netherlands it's 68%. Those numbers seem pretty typical, according to Wikipedia at least.
Re:Stupid prices (Score:5, Informative)
Re:Yeah! We're number one! (Score:2, Informative)
Healthcare? Sure, we need to do at few things to change it for the better:
How about fixing my 2 month wait for a doctor's appointment? And that's with me letting them schedule the appointment with any available doctor within a 30 mile radius on any day or time???
Or the specialist that can't see me because HIS hospital won't allow him to - despite the fact they accept my insurance plan. They want me to change my PCP to someone at their hospital so they can get more money - to hell with my health or the fact that the specialist's hospital is an hour's drive from my home.
Re:Infrastructure is part of it ... (Score:5, Informative)
Russia: 17,075,400 km^2. Population density: 8.3/km^2
Phone plans: still cheaper than in the US.
Re:Stupid prices (Score:4, Informative)
You maay have the largest plan for sweeden.. but do you roam when you go to the UK? even if not.. all of Western Europe is ~1/3 the size of the US and has 1/3 MORE people
United States | 86.5 people/mi^2
At 450,000 km2 (173,746 sq mi), Sweden is the third largest country in the European Union in terms of area, and it has a total population of over 9.2 million. Sweden has a low population density of 53 per square mile.
Re:Stupid prices (Score:2, Informative)
You failed to read my post (Score:4, Informative)
First off, incoming calls are not free, well it depends on the carrier, but ATT, Tmobile, Verizon and Sprint, you pay for both incoming and outgoing.
I clearly wrote "free to the caller". In Europe (and much of the rest of the world), the caller pays a fee to call a mobile phone. In the US, it costs the same as an ordinary call (typically free).
Your free calling statements, are not really free, they are built into the pricing structure of the plan, another reason why the plans are more costly.
Of course they are built in. That was the whole point of my post was to point out all the extras that are included in the cost of the line.
Unlimited SMS is not free, its a addon that you pay for, ATT for example is $20 for unlimited, $5 for 200
With Sprint, it is not an add-on and is included in the cost of the plan. The $31.87 figure I quoted was the cost of my plan per line.
Data is not unlimited, it is capped at 5G a month for nearly all of the cellular providers in the US (Soft cap for now)
It's not like OP's plan is "unlimited" in the strictest sense. Every data plan on the planet is limited by the throughput limit of the device itself. With Sprint, the soft limit is pretty soft. If you use over 5GB/mo for three months straight, you'll get a politely-worded letter to please get a data card. Ooooooh. Scary!
Also, the price point does not change if you bring your own phone to the table rather then paying for the subsidized one.
This is true. But if you're bringing your own device, why not activate it on a prepaid plan and get unmetered (there, I didn't use the "unlimited" word. Happy now, Herr Pedant?) voice/data/SMS for $45/mo or metered airtime @ $0.10/min?
Re:Stupid prices (Score:4, Informative)
It would be interesting to know how much coverage all of Finland gets. Sure, the plan is great when you're in a city... but how good is it when you go to a random part of the country? What's the cell coverage like?
Coverage is almost same everywhere, 99.6% for whole country. And like you said, the northern parts dont have a lot people living nearly, but they still cover those areas.
Re:Stupid prices (Score:3, Informative)
Because a tower is a tower. If you make it tall enough, then you can put multiple sets of equipment up there.
Re:Stupid prices (Score:3, Informative)
I think he was being sarcastic. (A dangerous thing to do in a post, as you'll likely be misunderstood.)
Note that he did point out that the different towers handled different protocols. Probably by this he meant it would be three times as expensive to have the same coverage. I don't think he meant to imply that there were actually three times as many towers. Rather that the areas of good coverage were segmented into micro-monopolies.
Re:Yeah! We're number one! (Score:2, Informative)
The alternative is the "Silvio Berlusconi" model, where only the super-rich can afford to run.
Not true, at least not in Germany, where I'm from. We don't even have the US situation where Congress and the Senate are controlled by rich people. Our parliament consists primarily of middle class people. In Germany you can only give money to parties and not individuals. The parties then in a democratic party-internal process decide who amongst them gets to run. It is much harder to bribe a political party than an individual politician like in the US. And by party, I mean card-carrying, dues-paying members that participate in the party not like here where you can just register for a party and then dictate to them who their candidate should be.
Rich people, in general, have more of everything than someone with a median income. Those are the breaks. Even in colonial days, a rich person could print up more pamphlets than a poor person. I suggest accepting this fact and working around it rather than fighting it.
While I agree with you to a certain extent, I do not think that this should lead us to abandon all attempts to get closer to the ideal of fairness for all. Getting something 75% right is better then getting it 50% right. I would agree though that it is not always so obvious what constitutes an improvement. I also have a far bigger problem with corporations than with rich people. I don't think that corporations should be allowed to get involved in the political process. The people working at one can already do that on their own anyway. I would also limit individual financial political contribution to 1/20th of the median household income per year.
Re:Stupid prices (Score:3, Informative)
I bet Finland has the highest level of public Transportation usage per person as well...
Re:Stupid prices (Score:3, Informative)
How about we get like almost every other country in the world, and ban prescription drug advertising, that would cut down on their costs dramatically, and make drugs cheaper for everyone.
Amen to that. I spent a couple of months in Dallas at the beginning of year, and I remember being utterly shocked by seeing a TV advert for a prescription antidepressant, aimed at depressed people. 'Ask your doctor about !' Yeah, let's condition mentally ill people to ignore medical advice and instead opt for the medication that'll increase your profit margin.
Here in the UK our advertising watchdog would have the people responsible for that taken out and shot, simply as a public hygiene measure --- people who think that sort of thing is acceptable practice do not belong in a civilized country.
Re:Stupid prices (Score:5, Informative)
News alert... The wealthy in the US already pay a lot of income taxes as the system is highly progressive. [snip] 39% of the ...total personal income taxes came from top 1%
While you are likely technically correct, there's a nuance that needs to stated: Warren Buffett noted that there are significant inequities in this so-called "progressive" tax system:
http://www.timesonline.co.uk/tol/money/tax/article1996735.ece [timesonline.co.uk]
For those who do not RTFA, Warren notes that it's essentially ridiculous that he pays more as a percentage of his wealth than his secretary (who makes about $60K/year) and who has substantially less disposable income. Roughly summarized, Warren has essentially noted "tax the rich--it's OK, we'll figure out a way to make more."
Re:Stupid prices (Score:2, Informative)
Re:Stupid prices (Score:3, Informative)
No, it simply isn't. No matter how deluded you are, there is no measure by which your system is even close to average.
Re:Stupid prices (Score:1, Informative)
In my honest opinion, why the situation is like this in Finland is simply because raw copmetition was let do it's job. Back in 2000 there were only two major mobile operators with - as it appears now - something you might call a price cartel or just lousy competition. Then Telia made a spectacular entry to the market, all with a television commercial where a third contestant enters a boxing ring and knocks out the two lousy boxers. (See it here: http://www.youtube.com/watch?v=686fhd3i4B4 [youtube.com] ). There soon began a major flow of price-aware customers to Telia, and this forced the other two operators (Elisa and Sonera) to initally slightly lower their prices. By the end of the year the market was overflooded with numerous startup-companies offering even lower prices. Of course, only a few biggest survived (actually, only DNA Finland) and the smaller ones got eaten by the big players - Saunalahti (originaly a dial-up operator) was last to be sold to Elisa, in 2005.
After Telia and Sonera merged in 2003 in (one of) the biggest merger of Nordic history, DNA Finland (and Saunalahti) were left to be the only serious little-big mobile operators. DNA is well known for their aggressive marketing and some unbelieveable offers for new customers - at one point (for a short period, when the competition was it fiercest) you would get around 100 € worth of free calling time for switching the operator. When the free calls had been used you could switch again without any penalty. However, this practice was soon abandonded - especially after the government passed a law which requires phone numbers to be transferable between mobile operators and customers are able to swtich operator without changing their phone number (phone number transfer is by law a free service so you, rather than your operator, own your phone number).
Nowadays we have three major mobile operators, all with 100% land coverage and almost identical no-frills billing plans and rates. Telia and Sonera merged in 2003 . By around 2005-2006 prices settled to 0.069 € / min for calls to any domestic landline or mobile. This standard rate hasn't dropped for many years but new billing plans (including flat-rate for certain amount of calling minutes) have been introduced. It appears the market has found a sweet spot for operating their networks in this coverage at the billing rate of 0.069€/min and about 33%-33%-33% market share. Your normal phone bills are around 10€ to 25€ per month.
( Also, your phone bill will get very quickly bigger if you travel and make calls from abroad or to abroad. However, this is being tackled by the European Union, which has introduced price limits for roaming services, that will make calling within European Union considerably cheaper than it is now. The limits are being adopted currently. More about this: http://en.wikipedia.org/wiki/Regulation_on_roaming_charges_within_the_European_Union [wikipedia.org] )
Re:Yeah! We're number one! (Score:3, Informative)
getting these days...that I would have seen something about this on tv??
Why? It happens every day. It's not news. There's nothing sensational about it. Especially not compared to a "presidential death board". Unless you dig way deeper than a 30 second sound bite allows, it's indistinguishable from any other death. Just someone nobody's ever heard of dying from pneumonia.
Have you ever tried going through the hospital needing treatment but uninsured (with or without the ability to pay cash)?
You haven't lived until you go to the hospital with your wrist slashed open (construction accident) and the only person who even looks at you hands you a clipboard to fill out oblivious to the bloody shirt you're pressing against your dominant wrist. I was even insured on that occasion. They wanted proof of insurance before they would even bother looking at it since I didn't appear to be actually dying.
As for the TV news, it's mostly worthless.