U.S. pays most for cell service; wireless firms disagree
August 12th, 2009, 11:02 am · 29 Comments · posted by Tamara Chuang, a.k.a. The Gadgetress
Noted: Americans pay more for cell phone service then (corrected 12:20 p.m.) than, well, everyone else in the world, according to a new report by the Organisation for Economic Co-Operation and Development.
The Paris, France-based OECD, which studies economies and offers suggestions to government, concluded that the mid-level user in the U.S. spends $635.85 a year for cell phone service compared to a mere $131.41 in the Netherlands and Finland. That plan includes 780 voice calls, 600 text messages and 8 multimedia messages. (See the chart below showing OECD’s average annual bill for medium-usage wireless customers. The full list of countries is HERE.)
CNet’s Marguerite Reardon points out that the U.S. will likely continue to be the most expensive as Verizon, Sprint and others invest in faster 4G wireless networks and ultimately raise prices even higher. Although, she noted, more consumers might very well turn to lower-cost prepaid services with flat-rate pricing.
| Country | Total ($US) |
|---|---|
| Netherlands | 131.44 |
| Finland | 131.44 |
| Sweden | 137.94 |
| New Zealand | 256.02 |
| Switzerland | 267.08 |
| Japan | 267.49 |
| United Kingdom | 272.02 |
| OECD | 317.77 |
| Australia | 332.99 |
| Korea | 340.13 |
| France | 378.02 |
| Italy | 394.26 |
| Germany | 405.20 |
| Mexico | 417.62 |
| Canada | 500.63 |
| Spain | 508.26 |
| United States | 635.85 |
| Full list: OECD |
But wait a minute, says the CTIA Wireless Association, which represents the nation’s wireless companies. It issued an immediate response, calling the study “flawed.”
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Comparing calling plans by country make no sense, it said. Consumers in America make way more calls than everyone else thanks to family calling packages and unlimited plans, which weren’t taken into account by the OECD study.
CTIA stood by its previous statement that U.S. consumers have the lowest per-minute rates of all OECD countries — $0.06 per minute (based on the Federal Communications Commission annual report of the mobile industry, page 8).
Someone over at the CTIA also had time to read through the voluminous OECD report and pointed to “the real story,” on page 275. CTIA provided the excerpt:
“It is important to note again that the OECD calling pattern in the basket can be significantly different than common calling profiles in a specific country. For example, the high-usage OECD basket includes 1,680 outgoing voice calls per year while users in the United States average 9,600 minutes of voice calls (combined incoming and outgoing) per year. In this case the basket provides the cost of buying exactly the calls and messages in the OECD basket rather than what may be considered a ‘typical’ bundle in the market.”
CTIA’s point is that the report doesn’t take into account that U.S. wireless consumers not only talk three times more than OECD’s ’high usage’ group, but we could talk even more for the same price if we actually used up all of our plan minutes.
Hence, the U.S. price per call is the lowest of all countries, says the CTIA. In the CTIA’s semi-annual survey, the average wireless consumer in the U.S. uses 760 minutes and 400 text messages a month. The average consumer bill is $50.07 per month.
The CTIA doesn’t mention how many consumers actually do use all of their monthly minutes. I don’t usually, but the few times someone in my family plan went over the allotted minutes, we got charged $0.35 per minute.
As a side note, the CTIA statement mentions that some of its members offer unlimited voice and text messaging packages, including Irvine’s Boost Mobile $50 plan and Tracfone’s “Straight Talk” plan for $45.
Is prepaid our future?
More on cell-phones:
Check out the Gadgetress Guide to local cell phone services
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This poll is full of FAIL. “I never use up my monthly minutes” is not an answer to the original question.
“I think they should lower are (sic) bill and still give us a better plan” Is anyone proofreading at all?
Hey Dood — I’m allowing readers to add answers, which is more fun then yes/no polls. My guess is that no, whoever added that last answer didn’t proofread it or know the difference between ‘our’ and ‘are.’ Dood! The poll is just for fun and far from scientific, though it may offer someone insight into, um, something.
It’s time to proofread!!!! What if they put something offensive in there, would your answer be “oppseydaisy, it wasn’t me”.
Offensive is okay, just as long as it doesn’t violate our reader policy.
Another “Grammar Police” alert.
By flawed they mean, “Right on target but casts us in a negative light.” Want to know you pay so much? Check out how much Verizon and AT&T spent on lobbying efforts last year. Who do you think paid for it?
Tamara: With all due respect, please don’t use “then” when you mean “than.” Thanks.
D’oh! In the lede too! I can’t promise whoopsiedaizies but I will try.
whoopsiedaizies,
Who cares? I read Tamara’s comment and understood it just fine. You need to shut your computer down and go get a LIFE. It would sure be nice if people could comment without having to worry about their English teacher reviewing everything they write. Grammar is not everyone strong point. Grammar is probably your only strong point and have no other skills what so ever.
All you wannabe internet English teachers need to get over it!!!!!!
**Here’s a hint to OCR writers and editors. When a significant portion of your readership calls you out for poor writing and bad grammar, perhaps it’s time to hone your skills. And Tamara? Let’s fix the typo in the first sentence, second paragraph, kay? (It’s extremely annoying to be constantly distracted by typos, spelling errors, and just plain poor english.)
Other than that, I think we’re getting ripped off by our cell phone companies.
Fixed, as noted.. Who’s kay?
Hey greylox
What are you, The Blog Grammar Police? Poor writing and bad grammar are quite common in the Blogosphere. People don’t have time to double check their comments. They either work or have a Life (unlike you). I blog on my lunch break and have very little time to make wannabe English teachers like you happy. You probably don’t have a job and live at home with your mom, So time isn’t a problem for you. As long as everyone’s comment make sense, Then all is good. Your comment has nothing to do with the subject at hand, So be informative or don’t waste peoples reading time with your grammar OCD.
I also remember reading a story that are technology is behind the times compared to other countries. So we invest in faster speed, but have lower end technology? Not sure if this is true.
I think it may be time for Obamacare to include Cell Phones rates in their 1,000+ Page Healthcare Bill.
And you know its not already in there how exactly?
we are all suckers to the cell phone providers much as we are all suckers to the drug manufacturers…and someone said it right…because of their lobbying efforts…
I used to work for vzw trust me we were made to get all your money as much as we could sell you and addon to your pricing plan cell phone companies in America are ridiculous.
There’s a very simple reason for this – we are very spread out, geographically. Go to Asia and 3g was implemented years ago.
Potatoe, potato . hue kares aboot spheling end grahammer krackers?
Anyhow,,,, companies like cell carriers base thier pricing just like cable companies do. They study the demographics and charge as much as they think they can without losing customers. For instance Cox cable is the big cable provider around here and rates in OC are considerably higher than in other Cox terriers around the country. Cell phone minute usage by users has nothing to do with actual cost to by carriers. Its just a way too justify selling the same product to consumers at different rates.
I have no doubt we pay more than other countries. In Europe, you are billed only for calls/text messages you make. In the US we are doubled billed (I’m charged when you call me and you are charged when you call me). Not to mention most of us are charged minutes when we check our voicemail.
Either way, the cell phone companies nickle-and-dime us and this study is no surprise.
Do you see a pattern here? Highest cell phone and health insurance rates and lowest qaulity…,sounds like we need reform and regulation to me, How come the Europeans have the best?
Well, that’s a simple answer. We fund everything else for the whole world in advancement. Plus, we don’t pay taxes up the a** like other modern countries.
because they dont have lobbyists spending billions of dollars to influence their lawmakers to keep things the way they are. America would be better off without special intrest lobbyists…
Unfortunatly the people that need to act to make lobbyist illegal or to place greater restrictions on them, are the same people under their influence. Money talks.
Don’t blame Tamara for how much we all hate the cell companies
direct all that anger and zeal towards the corporations and government 
They are ripping us off! Not just on the actual per-minute cost, but also on all the hidden charges added to bills. Never mind the fact that we have to pay for incoming calls, I know of no other country where this is the case.
I only use prepaid phones – my current favorite being NET10 because of reasonable rates, good customer service and great coverage. And because they don’t add those annoying charges, I always know exactly how many minutes I have left on my phone.
The fact is that prepaid is where it’s at. Unlimited prepaid is even better.
Straight Talk’s unlimited $5 deal over the Verizon network is awesome.
Well I for one have switched from Tmobile to Straightalk… much cheaper and the service is amazing, always 5 bars and the phone selection is getting better. Switched my kid from Cricket as he was dropping calls and he loves it… The big cell companies will never learn until we all switch to unlimited plans like Straightalk and Boost but by then we may never go back… Let’s all hope for $20 month unlimited everything…
here’s hoping 20.00.. I would love to see nextel/sprint crushedddd!!!!!!
It’s about time someone took a stand for the underdog consumers. Thanks! Strightalk!!