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.)
Missing Data, Towers Probably Influence Cost (Score:2, Insightful)
Of course this isn't the only factor, for example: I would assume China's median household income would affect their cell phone charges and cause them to drop despite country size. Wish they had data on China and Russia so this could be analyzed further. I don't see any in the data about these countries
USA area most other countries (Score:4, Insightful)
How is that free market working for us? (Score:3, Insightful)
Among the most expensive and not even for a service that is advanced compared to other countries systems. And so called competition between carries is for which carrier can offer you which features for a high price ($55) plan. There is no real competition when it comes lower cost plans. And finally, my opinion for the most expensive, the lack of open systems. Carriers lock people into certain models of phones. Those lock-ins not only keep customers from shopping for the best service/price, but requires the carriers to earn even more profit to subsidize the exclusive contracts with the phone vendors.
Re:Stupid prices (Score:5, Insightful)
It's because US carriers compete based on who has the iPhone and who has the Pre rather than network price/quality. Then users "buy" $800 devices for "$99" and make fun of uncrippled foreign cell phone brands because they're "so expensive", and have useless features like application downloads from Sourceforge.
Re:Probably Government "Fees" (Score:4, Insightful)
I would wager that some government taxes or fees on the infrastructure is what is causing the high prices.
Or at least, that's what the cell companies will claim...
Oh I'm convinced that very large portions of telecom money go to congress... just not in taxes.
Skype, Fring, Googlevoice (Score:1, Insightful)
VOIP FTW
Re:Stupid prices (Score:5, Insightful)
What I'd be intrested to see. .instead of how much we all pay is.. how many customers are served Per tower - and how many towers vs area vs coverage.
You maay have the largest plan for sweeden.. but do you roam when you go to the UK? even if not.. all of Western Europe is ~1/3 the size of the US and has 1/3 MORE people
comes out to be:
Western Europe | 514 people/mi^2
United States | 86.5 people/mi^2
Basicly it takes 5 times the area to hold the same numebr of people - asume population was evenly spread (i know it isn't) it should cost 5 times as much to provide for the same number of people..
"Average US plans cost $52.99 per month compared to an average of $10.95 in Finland."
Assume the Finland price for all of western Europe - and we pay 5x the cost for something 5x as expensive to provide..
People don't realize how large the US is.. and that most plans now days there is no roaming from sea to sea.. thats alot of area to provide for..
Missing the point (Score:2, Insightful)
Area is a bogus argument (Score:3, Insightful)
Because the US does NOT have universal GSM coverage. For example, a GSM phone is pretty useless in New Hampshire if you live north of Concord.
There are vast areas of the US with no cell coverage at all.
What's wrong with US services isn't in this study (Score:3, Insightful)
1. The study is crap. The "high usage" plan is 1600 minutes/YEAR, 660 SMS/YEAR. That's not high usage; it's barely even light usage. The US plan selected has a low number in "fixed" but a high number in "usage"; this would suggest that they calculated what it would cost based on the cheapest-available plan. US overage charges are indeed ridiculous, in the 40c/min range, but nobody ever pays them because adding airtime to a plan costs very little.
2. US plans offer coverage nationwide and with no charges other than airtime for calls from anywhere to anywhere in the country. When there's an EU-wide plan providing the same coverage - no international charges - then we're getting close to an apples-to-apples comparison.
3. Population density is a real problem. I think the person upthread who suggested that the real metric that should be used is total # of subscribers divided by total # of towers is right - average population density is misleading.
Explanation (Score:5, Insightful)
Re:Stupid prices (Score:5, Insightful)
On the other hand I think US carriers are guilty of heavy upselling. If I live in a dense city in a dense area (Boston, New York, DC, etc) and do 99% of my calling from there why can't I pay for a local plan and avoid subsidizing the tower/person costs of residents of Wyoming?
Re:in the US? (Score:5, Insightful)
Seriously, I don't know what he's smoking. I pay roughly the same in income tax here in the US (once you add up federal, state and things like social security tax) as I did in the UK, but also get to pay for medical. Awesome!
Re:Stupid prices (Score:4, Insightful)
Yes, companies should try to maximize profits. However, what you just described is a monopolistic profit maximizer. Understandable with a new wonderdrug that cost billions to develop, but it should absolutely not happen with general health care and phone network cartels of all things.
Re:USA area most other countries (Score:4, Insightful)
But providers often don't cover sparsely populated areas, even when they are licensed to do so. They might cover only the major highways in the area, or provide just enough coverage to meet any licensing requirements.
The carriers with the best rural coverage might cost more - but is this because their costs are actually higher, or because their customers are willing to pay more for better service? Verizon has a distinct advantage over the other carriers in the USA, as they have more 800 MHz licenses than the others - so they can build less towers to provide usable service in rural areas.
Re:Yeah! We're number one! (Score:5, Insightful)
> about 70% of the people in the US LIKE what they have
As a European living in the United States, I think that is because the people suffering by far the most in the US are so ill-informed about other Western democracies and so brain-washed from an early age, that they actually are proud of the abuse they're suffering in this country! After all they constantly hear they're "no. 1". What they generally don't hear is that the US is "no. 1" in the percentage of uninsured children etc. Even the ability to legally bribe politician here, called "campaign contributions", is called "freedom of speech." I guess corporations and rich people have much more "freedom of speech" than someone with a median income.
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Re:Missing Data, Towers Probably Influence Cost (Score:3, Insightful)
As someone else pointed out, Finland [wikipedia.org] has a population density of 16/km2) (40/mile2) whereas the US has 31/km2 (80/mile2).
Some will say "apples to oranges" so let's compare comparative things then:
California [wikipedia.org] vs Sweden [wikipedia.org]
Size: Sweden is 449,964 km2, California is 423,970km^2.
Population density: Sweden: 20.6/km2, California 90.49
Or how about the fact that every single EU country is at a lower price than the US?
Stop making weak excuses about how tough it is in the US, and how it's unfair to compare it to anywhere else. The US cell companies are quite obviously gouging you - make them stop. The US claims to be the greatest country in the world, so it's time to either walk the walk or not talk the talk.
Quit riding the coat tails of previous generations and start acting like grown ups instead of kindergarten kids.
You, as a country, decided it was more interesting and important to argue over whether or not Obama was born in Kenya or Hawaii [1] instead of making sure that not only were the people directly responsible for the economic collapse [2] held responsible, along with the enablers of this [3].
We could argue that those who profited from it (short trading I think?) should be punished, but that might be going too far.
You were number one when it came to being great. Now you're mostly just number one when it comes to military spending, lawsuits, obesity (though the EU is quickly catching up) and ignoring the real problems. Oh, and you're probably the greatest nation in the world when it comes to gouging the consumers and employers. Okay, maybe not employers. I'm sure there are nation worse than you, but it's not a good thing when you have to improve your game just to be better than some 3rd world country.
[1] Ignoring the extensive background check that I'm sure the CIA, FBI and US Secret Service does - obviously they're incompetent and stupid as they didn't realise he wouldn't be eligible for the position of president
[2] It's not a crisis when 500 billion dollars disappears, that's a collapse
[3] Like the congress people who thought it'd be a great idea to make it mandatory to give loans who clearly wouldn't be able to pay them back
Re:Stupid prices (Score:5, Insightful)
Or how about you use Finland's population density instead, which turns out to be almost exactly half of that of the U.S. That pretty much destroys your argument.
Re:Stupid prices (Score:5, Insightful)
Re:Stupid prices (Score:5, Insightful)
Except the odd thing is, a value added tax is a tax on creation, not consumption. You don't "add value" by consuming, you add it by creating. A sales tax is, in fact, the best consumption tax. After all, would you rather be taxed because you built an addition onto your house, or taxed when you sold the house for profit?
That said, all forms of "consumption tax" (either sales or VAT) are regressive because they disproportionately tax people who spend higher percentages of their incomes on consumables. You want to make it progressive, you make the sales (or VAT) rate proportional to total price, so you pay more tax on more expensive things.
Comparing Apples to Oranges (Score:5, Insightful)
In the US, the monthly fee includes:
So we pay more, but we get more. You have to buy your own phone, and you have to pay to call mobile phones. Also, our plans don't have to be so expensive. By way of example, I have a 4 line family plan that costs $31.87 per line. All 4 lines have:
Now I look at what I get for $31.87/mo vs. what you get for 29 Euro/mo, and I am not seeing why I should be so outraged. Which is a shame really, because I do so enjoy getting worked up.
Re:Stupid prices (Score:2, Insightful)
Unfortunately, we have no real chance. They're talking about mandatory insurance, which isn't going to lower your or your employers' costs any. It won't lower the cost of health care, either - because the system is predicated on a free market, and there is no free market in medicine. Unlike buying a car or a washing machine, you have little to no choice. When your heart goes out or your retina detaches, you have to go to the hospital.
When I had an eye operation last year, I was prescribed eyedrops, and called around to find the cheapest place to get the prescription filled. There was over twenty dollar difference between places, ranging from ~$60 to >$80 depending on the store. But my co-pay was the same no matter where I bought the drug, and at $4 per gallon of gasoline, I went to the closest place. It was also the most expensive. It would have cost me $24 no matter where I bought it.
The drug itself retails for $26 in Canada. The bloodsuckers in the drug industry are stealing from us, too, and their congressional lapdogs let them.
As to the VAT, boy I just LOVE those regressive taxes, don't you? The middle class and poor would pay tax on close to 100% of their income (with the poor paying tax on all of it) while the rich get a tax break on every penny they squirrel away. It's basically a national sales tax, which IMO is the second worst tax, right behind property tax.
Give me a health care system like Canada and Europe. I'd love to see health insurance nationalized and the bloodsucking thieves in the health insurance industry put out of business. They are only parasites, and they are the reason our health care is the world's most expensive while we have far lower life expectancy and infant mortality than almost all other industrialized nations.
Re:Stupid prices (Score:1, Insightful)
Western Europe | 514 people/mi^2
United States | 86.5 people/mi^2
Finland: 40 people/sq.mile
Sweden: 53.3/sq.mile
Maybe that explanation would fly for "western Europe", but not so for the Nordic countries. As far as I know, cell phone plans are actually cheaper in Sweden/Finland than in most parts of Europe.
I don't know the reasons behind this, but I think competition might be one of them. Another possible reason is the aggressive push towards cell phones; being a Finn, I can't speak for the Swedes, but at least here phone companies are actually pulling landlines on the countryside and forcing people to go mobile (if they haven't already done that). Maintaining the landlines is simply too expensive from the phone company's point of view and very few people (with the exception of old people) want/have anything but cell phones. It sucks for people who use ADSL for Internet, though...
Re:Stupid prices (Score:2, Insightful)
You're taxing the poor bastard who'se working two jobs living paycheck to paycheck 100% on his meager wages while giving a break to the fat cat in the corporate office who can AFFORD to invest and save.
If you think the CEO of McDonald's works harder than the fry cook, you're delusional. If you think the programmer works harder than the roofer you're insane.
Re:Stupid prices (Score:3, Insightful)
Re:Missing Data, Towers Probably Influence Cost (Score:3, Insightful)
It is really difficult to explain to most Europeans just how incredibly moderate your weather is. Minneapolis is south of Milan but colder than Moscow. Dallas' highs and lows are almost exactly the same as those in Damascus.
Re:comparing apples and oranges..... (Score:3, Insightful)
Re:Stupid prices (Score:3, Insightful)
Unfortunately the contract phones have been making inroads in Europe too, but the situation isn't nearly as bad because enough people still want the phones separately. Due to this, the carriers can't actually cripple the phones they provide or charge exorbitant prices for simple network service. Basically, you're only limiting yourself to the 24-month billing lock in, but the Americans are also getting higher prices, less choice in hardware, crippled software, and no realistic option to buy separately.
Plus if the European carriers started acting like American carriers, the governments would come down on them so hard Microsoft's fine would look small...
Did anyone look at the spreadsheets? (Score:5, Insightful)
Did anyone look at the spreadsheets? What the hell are the numbers in them even supposed to be? It says "tax included" thereby implying that they are monetary amounts, but they don't say what unit, and the total for the US in the low usage one for August 2008 is 279.52. 279.52 of what units for what? For one month? Beats me.
Does anyone know what the numbers actually are?
Re:Missing the point (Score:5, Insightful)
Okay, in that case you'll be pleased to know that there are plans even cheaper than yours in Europe. For the summer, I'm using a pretty nice flip phone that cost me 50 CHF (~ $45) up front and costs me about 10 CHF/month, also with unlimited text. But I also get a lot more talk time than you. Also, keep in mind that Switzerland is one of the most expensive countries in Europe.
The point is that the same American plans can generally be found in Europe for cheaper. There is no reason that those "outrageous plans" (as you put it) need to cost so much.
Re:comparing apples and oranges..... (Score:5, Insightful)
Cell phone services over here are just dreadful. Why you all pay so much for such mediocre service, I really don't know.
Do you know how to pay less for better service in the US?
I didn't think so.
There's your answer. In the US, you have the choice of high-priced, mediocre service or no service at all. To make matters worse, a cell phone has almost become an essential tool for most Americans. So if you want better and cheaper service, your only (unrealistic) choice is to leave the country.
Ideally, our capitalist economy should keep all the prices down, but the cellular giants collude to keep prices high and service poor. They also lobby the government to prevent any mandated change.
It's completely appalling, but very very hard to change as a voter choosing from an extremely limited subset of corrupt politicians. That said, no country is perfect. I am sure there are some things about the US that you find superior to Britain as well.
Re:Yeah! We're number one! (Score:5, Insightful)
It isn't THAT bad over here...at the worst you see on any polls, about 70% of the people in the US LIKE what they have. I dare say you can't hardly come up with any other topic that many Americans would agree on. So, why try to chuck the whole system, that the majority of people are seemingly happy with? Why not just fix what parts of the current system are broken?
Because your health care system, such as it is, is the least efficient health care system in the developed world. Health care in the US costs twice as much per capita as the next worst nation, for what amounts to roughly comparable service. And really, the service is only roughly comparable if you ignore the significant numbers of people in the US who aren't insured at all (in the neighbourhood of 45M people, last time I checked), and don't really get any service unless they're catastrophically ill.
Just because your corporate masters have made you eat shit and like it, doesn't mean the shit is good for you.
Re:Stupid prices (Score:1, Insightful)
Why the hell mobile plans are so costly in US? I
Because in the USA the government and citizens are afraid of businesses. In most of Europe, the businesses are afraid of the government and citizens.
Re:Stupid prices (Score:5, Insightful)
.
Ok, I'll take the bite and go offtopic, since I'm not the first one.
Born in Europe, lived there 25 years, I've lived in the U.S. 13 years so allow me to know exactly what goes on in both places.
You DO NOT pay less taxes in the U.S., it just seems so. Wanna crunch some numbers?
Using Sweden as an example, feel free to use any other country
Sweden minimum wage: $20/hour
U.S. minimum wage: $6.75/hour
Sweden taxes off the paycheck: 50%
US taxes off the paycheck: (depends on which state you live in: 20% to 30%)
Sweden health care system: excellent
US Health care system: Excellent if you are rich. Add $200/month (my plan with $500 deductible, which is ridiculous that I still have to pay the first $500 and also doctor visits) or more for medical plan. That's $2500/year. Pretend that it's coming out of your paycheck as part of your taxes and see how much higher your tax percentage goes)
Sweden education system: Universities (less than $5000 for 5 years including books, much less with scholarships)
U.S. education system: Universities ($50,000 to $400,000+). $50,000 gets you a degree in a low quality university. Add that to your taxes.
Swedish High Schools system: very good
U.S. High School system: Mediocre
Sweden paid vacation: 5 weeks/year
U.S. paid vacation: 2 weeks/year (when you're lucky, I don't get any, only unpaid time off).
Street lights in Sweden: really good. Even rural areas are well lit.
US: not even big cities are well lit everywhere, nearly nonexistent in rural areas.
Want me to go on? Nobody likes to pay more taxes, but comparing tax rates directly without taking into account everything else is pure fiction.
By the way, I'm not swedish. I could have used any other country as an example.
Re:Stupid prices (Score:2, Insightful)
Re:Stupid prices (Score:1, Insightful)
No it doesn't. What matters is the population distribution. Are the people evenly spaced throughout the country, or are they concentrated in cities leaving very sparse urban areas that also need to be served?
Strong economy (Score:1, Insightful)
You need rich people. When's the last time a poor person gave you a job?
Are you sad about all the layoffs that we have endured due to the economic downturn? Want more jobs to be created? Then start using your phone! Spend that money so that rich people will get richer and hence create more jobs.
Stupid selfish American consumers think that jobs just grow on trees. You need work, we need money to pay you with...YOUR MONEY....so stop complaining and start spending.
Sheesh.
Re:How is that free market working for us? (Score:3, Insightful)
Excuses, excuses. Free market jihadists are like communists: it can never fail, it can only be failed.
The entire we reason we have regulations and oversight is that yes, we tried "the free market" - and it was called the Gilded Age.
Re:Stupid prices (Score:5, Insightful)
Did you happen to know that Pharma spends more for advertising in the US than R&D?
How about we get like almost every other country in the world, and ban prescription drug advertising, that would cut down on their costs dramatically, and make drugs cheaper for everyone.
Re:Yeah! We're number one! (Score:4, Insightful)
What they generally don't hear is that the US is "no. 1" in the percentage of uninsured children etc.
Uninsured does not equal no health care. The US has universal health care, it's just way too expensive because it is generally done in the ER. It also misses out on the cost savings that occur when you do preventative care. This is why it is so infuriating to see the left and right wing nuts going on about "socialized health care". We already have it! Let's sit down and figure out a way to cut some of the costs.
Even the ability to legally bribe politician here, called "campaign contributions", is called "freedom of speech."
The alternative is the "Silvio Berlusconi" model, where only the super-rich can afford to run. Limits to contributions and the wide-open nature of US campaign finance limits the corruption. The hardest part is the "soft money", which is constantly an issue here.
I guess corporations and rich people have much more "freedom of speech" than someone with a median income.
Rich people, in general, have more of everything than someone with a median income. Those are the breaks. Even in colonial days, a rich person could print up more pamphlets than a poor person. I suggest accepting this fact and working around it rather than fighting it.
Re:Stupid prices (Score:3, Insightful)
Did you happen to know that Pharma spends more for advertising in the US than R&D?
Its worse than just advertising, its marketing in general: which includes buying politicians, doctors and paying hospitals to give away "free" samples of baby formula to parents who are then told "don't change the formula, it can be bad for your baby". And then there is all the advertising. Frequently this is for new drugs that aren't as good as existing ones but of course we're expecting that the newer the better, and so are the doctors that don't do their homework too.
We're screwed. We know we're screwed, and there is nothing we can do about it.
Re:Stupid prices (Score:5, Insightful)
In 1986, EU pharmaceutical R&D exceeded U.S. R&D by about 24 percent, but by 2004, EU R&D trailed U.S. R&D by about 15 percent. During these 19 years, U.S. R&D spending grew at a real annual compound rate of 8.8 percent, while EU R&D spending grew at a real 5.4 percent rate.
The US spends 15% more on pharmaceutical R&D than the EU. Other regions also invest in medical R&D. The USA is certainly not paying for the entire world's pharmaceutical R&D.
It hurs innovation, technology and economy (Score:3, Insightful)
I am not a heavy phone user. I never bothered with a data plan. I pay $40 per month for a minimal voice plan. Most of the time I'm with my laptop, so I don't pay extra for those features. It's also the most important reason I never bothered with an iphone.
But it could change. I'd be interested in getting all those if the fee is reasonable. But it is not. So I don't use those features. I think I am not alone. On the other hand the mobile market needs more people to use these features, which would boom related technology (software/hardware) innovations. In the end, the country loses.
Re:Stupid prices (Score:3, Insightful)
Are you sure?
I'm sure that some people would pay more in taxes, others, perhaps, less. So how do you know into which group I fall?
P.S.: If you count health insurance, and what my employer pays in health insurance, I suspect that we pay more for less. Naturally I can't assert that as truth, as the actual numbers involved are secret. (I.e., I know what I am charged, and I know what my employer claims it pays, but I have no way to verify the claims.)
My suspicion is that with full governmental health coverage the elimination of much accounting would easily pay for any inefficiencies, and that many of those "inefficiencies" translate into better health care.
I know-for-certain that today's health care is technically better than it used to be, but the user-interaction involved in care is significantly worse than before the HMO's appeared. Doctors previously didn't limit their patient involvement time to a certain number of minutes before going on to the next patient. Now it's official policy (a policy which caused certain doctors that I have known to retire). And medical malpractice insurance makes part-time medical practice impossibly expensive. (Nurses generally seem to be less endangered by this...so far. Or perhaps they're just more willing to take risks.)
The doctors that I know seem to be on the fence about government medical involvement. Certainly they don't like the bureaucratic entanglement, but then they are already so entangled that they are close to closing up shop. That isn't why they studied to be doctors, and it's NOT they way they enjoy spending their time. So solitary medical practice is almost gone. They join into groups to hire accountants and others to deal with the out-of-control bureaucracy...but it's NOT federal or state bureaucracy. It's the medical insurance companies. And you probably don't have a clue as to how much that's costing. A cost which is a near total waste!!
The government set it up to be expensive. (Score:2, Insightful)
Re:Yeah! We're number one! (Score:3, Insightful)
Universal in the sense of "well just give us everything you DO have and we won't actually let you die till we discharge you"? Apparently the procedure is to camp out in the hospital parking lot until your condition worsens enough to be life threatening, then go in.
You can actually feel the derision dripping in the hallways if you go to the ER 'uninsured' even if you're ready, willing, and able to pay in full with cash. They see the 'none' under insurance and flee the area. Followup care will not happen, you won't get an appointment.
Re:Stupid prices (Score:1, Insightful)
No, nobody drives in circles around LA... there's too much traffic.