The US is among the most expensive markets in the world to purchase wireless data

[Shawn Knight]

In brief: In business, having more players on the field is supposed to foster a more competitive landscape but according to a recent report from Finnish research firm Rewheel, that is not reflected in the state of wireless data pricing in the US.

According to a recent report from Finnish research firm Rewheel, the US is the fifth most expensive market among 41 European Union and OECD countries in terms of median pricing per gigabyte (on plans with at least 1,000 minutes and 3Mbit/s for HD video) despite the fact that prices have dropped 11 percent since April.

Furthermore, the firm found that the US is the most expensive country among the same group with regard to median gigabyte pricing for mobile broadband (4G mobile and wireless home broadband plans with at least 3Mbit/s for HD video).

Rewheel notes that the median gigabyte price of smartphone plans in the US is four times higher than in European Union markets with four major network operators. The median gigabyte price itself is a whopping 16 times higher in the US than in competitive four-carrier European markets.

As such, Rewheel classifies the US as an outlier four-MNO market with much higher prices that are typically found in three-carrier markets with less competition.

This calls into question whether or not Sprint’s plan to merge with T-Mobile is in the best interest of consumers. The two carriers argue that consolidation will allow them to expedite the rollout of 5G technology and better compete with powerhouses Verizon and AT&T.

Permalink to story.

https://www.techspot.com/news/77519-us-among-most-expensive-markets-world-purchase-wireless.html

 

[toooooot]

It is pricey. I remember when we had a plan for 3 lines on Verizon and it was 140 dollars on average. 2GB data, limited messages and limited minutes. They did improve it later under pressure from more competitive rival companies, but it is still quite expensive.

I am quite happy I can have 6 line plan and spread the cost among my relatives. It is almost lowest anyone I personally know pays for a decent plan.

 

[Uncle Al]

Does this really surprise anyone? IP's, pharmaceuticals, automobiles, etc, etc. It's no surprise when you consider how badly we are getting ripped off across the board ......

 

[brucek]

Not sure if this is relevant here or not, but is this an apples-to-apples comparison as far as density of coverage?

For example, a common US practice is for the government to stack the incentives so the carriers have to cover all or most of the country, including places that are low population density and are uneconomical to serve. They are then further pressured to charge the same prices in the high density and low density areas despite the economics clearly being different.

Whereas in some overseas markets, the "market" is a much smaller, denser group of customers who can be served more economically. In those places, it's great if you're in the dense urban core, but if you're not, you're out of luck.

I'm not sure what the case is here and for the record I have plenty of complaints about US carriers so don't take this as any sort of overall championing of them, just trying to understand the data being presented...

 

[MilwaukeeMike]

Does this really surprise anyone? IP's, pharmaceuticals, automobiles, etc, etc. It's no surprise when you consider how badly we are getting ripped off across the board ......

We have cheap gas though, which everyone buys, and my Canadian relatives are always shocked at how cheap our alcohol is (they pay over 100% more there).

.... just trying to understand the data being presented...

Well.. you can skip this report. The whole point of the report was that GB cost more in absolute dollars in the US than anywhere else. That is meaningless without taking into account income.

As an exaggerated example to prove the point - Paying $10/GB is no big deal if you make $400/hr. If you make $4/hr then paying $1/GB is actually much more expensive.

(And for real, TS, will you please make your links in your story open a new window? Why would you put links in that end up making people LEAVE your website?)

 

[p51d007]

I'm not saying the carriers are 100% blameless, but, comparing the rates in Sweden, to the entire USA is silly. The ENTIRE country of Sweden's land area, is just a little larger than the state of California. ONE state, has the land area of the ENTIRE nation of Sweden. Now, add 49 more states, and you see the problem. The USA is spread out, and, to require NATIONWIDE coverage, does present a problem that requires a HUGE investment. Like I said, I'm not saying the 4 carriers in the USA aren't keeping the price high, but, there are a few other circumstances that might also keep them high.

 

[Evernessince]

Not sure if this is relevant here or not, but is this an apples-to-apples comparison as far as density of coverage?

For example, a common US practice is for the government to stack the incentives so the carriers have to cover all or most of the country, including places that are low population density and are uneconomical to serve. They are then further pressured to charge the same prices in the high density and low density areas despite the economics clearly being different.

Whereas in some overseas markets, the "market" is a much smaller, denser group of customers who can be served more economically. In those places, it's great if you're in the dense urban core, but if you're not, you're out of luck.

I'm not sure what the case is here and for the record I have plenty of complaints about US carriers so don't take this as any sort of overall championing of them, just trying to understand the data being presented...

Well first, no company would pursue an incentive if the cost outweighed the benefit. Second, ISPs and cell service providers have been collecting taxes from you, the customer, on top of your bill specifically designated for rural access. If the cell provider is not spending that free money on rural access then they are misappropriating it.

Something that needs to be pointed out, serving rural areas isn't a black hole cell service providers. Due to rural being low traffic areas they simply put up a few sparse long range towers. Rural areas don't need expensive 4G or 5G towers nor does it make sense given the technology's limited range. It's more expensive for cell providers to have to continue to upgrade, maintain, and add cutting edge towers in high density areas. The upfront cost is the only thing that stops companies from putting up towers, as in Rural areas it will take longer to recoup. In some areas there might be zero customers but that's what the taxes collected by the cellphone service provider are supposed to cover.

Even if we assumed that America has twice as much rural real estate as a percentage compared to other European countries, it most certainly does not make up for 4 times the price.

Does this really surprise anyone? IP's, pharmaceuticals, automobiles, etc, etc. It's no surprise when you consider how badly we are getting ripped off across the board ......

We have cheap gas though, which everyone buys, and my Canadian relatives are always shocked at how cheap our alcohol is (they pay over 100% more there).

.... just trying to understand the data being presented...

Well.. you can skip this report. The whole point of the report was that GB cost more in absolute dollars in the US than anywhere else. That is meaningless without taking into account income.

As an exaggerated example to prove the point - Paying $10/GB is no big deal if you make $400/hr. If you make $4/hr then paying $1/GB is actually much more expensive.

(And for real, TS, will you please make your links in your story open a new window? Why would you put links in that end up making people LEAVE your website?)

Fun fact, the average American fairs poorly when comparing income between 1st world nations. https://money.cnn.com/infographic/economy/countries-with-higher-wages-than-united-states/index.html

That's before we consider the higher pricing of basic services like healthcare, internet, and insurance among others.

 

[GeforcerFX]

Fun fact, the average American fairs poorly when comparing income between 1st world nations. https://money.cnn.com/infographic/economy/countries-with-higher-wages-than-united-states/index.html

That's before we consider the higher pricing of basic services like healthcare, internet, and insurance among others.

We seem to be doing pretty well in that list actually, considering not a single one of this countries listed other than Canada has 10% of the US's population. Considering the variances in cost of living across the country and how decently spread out and how large our population is (compared to Europe especially). My same job in Seattle pays $29,000, I get $19,000. I still have more extra income then that poor sap in Seattle does, not to mention my commute is easier and shorter so I cause less wear and tear on my car and use less gas, or I can actually afford to own and drive a car. I live a better more comfortable life then they do working the same low end job, in the same country, split by only 550 miles. If I did the same job in another city in my state I would have even more extra income as my cost of living would drop further (I live in one of the highest cost of living areas in my State)

 

[Sausagemeat]

Makes sense. The nerworks inbox america are an order of magnitude larger and more complex than those of European markets, or most of the world. Access is cheaper when you consider that. But people seem to have this absurd idea that all network access should cost the same regardless of how big that network is and the nature of the area it serves.

 

[cliffordcooley]

But people seem to have this absurd idea that all network access should cost the same regardless of how big that network is and the nature of the area it serves.

And some people think networks should be upgraded at some point in a twenty year span. Our service has remained the same over more than 15 years. That is absurd! Everything around us is being upgraded except for our ISP service. We are not blind. We can see ISPs are intentionally not upgrading and pocketing our monthly payments. You can stand in as a PR guy all you want. You are not pulling the blind over our eyes.

 

[vincentyu]

Base band fragmentation is the main reason:
The US has 12+ LTE frequencies and carriers choose to support different frequencies making phones(non-flagship phones) incompatible with each other thus increasing the cost of switching carriers. The worst offender is Sprint who shares none of its 3 frequencies with any other carriers. The EU and China both have 4+ LTE frequencies that most carriers there support that makes it easy to switch carriers even for basic phones.

It looks like the FTC is to blame for this utter waste of bandwidth unless resilience against nuclear war is a cited reason.

 

[CookiesMeLike]

Why Complain. In South Africa we are paying 9,37 EU per GB in contact and 0,063 EU per MB out of Contract
would love to pay 5.8 EU per GB

 

[DelJo63]

(And for real, TS, will you please make your links in your story open a new window? Why would you put links in that end up making people LEAVE your website?)

OH YEAH -- PLEASE!
for an example, try the links on new.google.com - - you get a new window or tab for everything

 

[DelJo63]

On the subject, only domestic carriers lock the user to their networks and dump rooming charges when you're traveling. Europe's GSM is far more open.

 

[MilwaukeeMike]

Fun fact, the average American fairs poorly when comparing income between 1st world nations. https://money.cnn.com/infographic/economy/countries-with-higher-wages-than-united-states/index.html

That's before we consider the higher pricing of basic services like healthcare, internet, and insurance among others.

You linked a graph of minimum wage, not income, and from almost 5 years ago. Today companies are starting to pay $15, which is more than double that old graph. Regardless - my point was that this study ignored cost of living in their comparison.

I'd love to explain wealth, cost of living etc, govt transfers and the like, but you'll just pick something irrelevant (like this out-dated min wage graph) and use it to disagree.

 

[Evernessince]

You linked a graph of minimum wage, not income, and from almost 5 years ago. Today companies are starting to pay $15, which is more than double that old graph. Regardless - my point was that this study ignored cost of living in their comparison.

/facepalm

That graph has both. You should probably take time to analyze it before making an incorrect statement.

Starting pay is $15 where? You are going to have to provide data for that, because it most certainly isn't the standard you claim it to be.

https://paywizard.org/salary/minimum-wage

FYI the graph was made in 2015 and the data is from 2014. That's 4 years worst case. Basic math errors on your part aside, do I really need to point out that 2014 was the last time the government published this data and is the currently most up to date information we have on many broad economic controls. In terms of economic data this is not old in any sense of the word and there are dozens of studies that use this government provided data. It's ridiculous to dismiss information based on only 4 years of age and you are ignoring the fact that data is often provided in lax windows and a majority of studies or info graphs are based off data 3 or more years ago. Your expectation that data be younger then 4 years ignores the realities of the time and effort it takes to compile this data or the fact that economies do not sift on a dime (except in rare cases). Economists realize this and it's why they continue to base their studies off "old" data as you say. Eh, but what do they know, they only went to school for 8 years in that subject.

We seem to be doing pretty well in that list actually, considering not a single one of this countries listed other than Canada has 10% of the US's population. Considering the variances in cost of living across the country and how decently spread out and how large our population is (compared to Europe especially). My same job in Seattle pays $29,000, I get $19,000. I still have more extra income then that poor sap in Seattle does, not to mention my commute is easier and shorter so I cause less wear and tear on my car and use less gas, or I can actually afford to own and drive a car. I live a better more comfortable life then they do working the same low end job, in the same country, split by only 550 miles. If I did the same job in another city in my state I would have even more extra income as my cost of living would drop further (I live in one of the highest cost of living areas in my State)

You are making assumptions. You are going to have to provide proof that cost of living is so much cheaper in America to make up the difference. FYI America isn't more spread out then any other country.

https://cdn.britannica.com/15/112215-004-C862204F.gif

looking at the NA continent, America has higher population cities and suburbs compared to mexico. The only sparse spot is the mid-west. Overall the population density makeup looks very similar between the two countries. FYI, population isn't so much a factor as time until return on investment is. Companies will expand to very profitable areas very quickly and trickle out to lower profit areas. If a company is making high profits in high population US cities, that would actually be an advantage over lower population countries and not a disadvantage. More money for them is always good in their eyes. In addition, like I explained earlier, cell service providers can utilize more sparse longer range towers for rural areas. This keeps the costs fairly low. Dense population areas on the otherhand have to use short range frequencies in order to carry more data and as a result more cell towers are required. You are going to have to explain to me how the US having a higher population is bad and not good as logic and data suggests otherwise.

 

[GeforcerFX]

You are making assumptions. You are going to have to provide proof that cost of living is so much cheaper in America to make up the difference. FYI America isn't more spread out then any other country.

https://cdn.britannica.com/15/112215-004-C862204F.gif

looking at the NA continent, America has higher population cities and suburbs compared to mexico. The only sparse spot is the mid-west. Overall the population density makeup looks very similar between the two countries. FYI, population isn't so much a factor as time until return on investment is...

My post was talking about average living wage, nothing about cellphones, don't really care much. But ROI does suck in my state, Havre MT has 15,000 people in the metro area verizon had to put up 7 4g LTE capable towers to deliver that service there. Kalispell MT has 95,000 people in the metro area, 11 towers. 4 more towers and you have a market with over 4 times the people.

as far as density went I was again talking more about cost of living and average wage

Europe, particularly Western Europe (which is what compares most with us in average wage) looks to be particularly dense.

http://3.bp.blogspot.com/-1M36Kd-Zbys/UHIRNpxRFkI/AAAAAAAABf4/TAagQA_R9wg/s1600/4xeek.jpg

But more than anything I hate when people like to compare individual countries in different areas to the USA since none of them are anything like us. There is no country in the world that is the same size, same racial makeup, and that varies so wildly in culture and ideas from one coast to the other.

Why do american's pay so much for cell phone service, simple answer is because we have the money to do it. There are cheaper services that a lot of people choose not to use, they want the newest greatest phone subsidized so they stick with the more expensive Verizon and AT&T plans, or they just don't care the money doesn't mean anything to them.

 

[Evernessince]

My post was talking about average living wage, nothing about cellphones, don't really care much. But ROI does suck in my state, Havre MT has 15,000 people in the metro area verizon had to put up 7 4g LTE capable towers to deliver that service there. Kalispell MT has 95,000 people in the metro area, 11 towers. 4 more towers and you have a market with over 4 times the people.

as far as density went I was again talking more about cost of living and average wage

Europe, particularly Western Europe (which is what compares most with us in average wage) looks to be particularly dense.

http://3.bp.blogspot.com/-1M36Kd-Zbys/UHIRNpxRFkI/AAAAAAAABf4/TAagQA_R9wg/s1600/4xeek.jpg

But more than anything I hate when people like to compare individual countries in different areas to the USA since none of them are anything like us. There is no country in the world that is the same size, same racial makeup, and that varies so wildly in culture and ideas from one coast to the other.

Why do american's pay so much for cell phone service, simple answer is because we have the money to do it. There are cheaper services that a lot of people choose not to use, they want the newest greatest phone subsidized so they stick with the more expensive Verizon and AT&T plans, or they just don't care the money doesn't mean anything to them.

Not to sound like a broken clock here, but you've afforded no proof that the sole reason American's pay four times as much for cell service can be attributed solely to expendable income. This is a good point and Americans do love their phones but it needs to be backed up with data. I also don't think it would cover a four fold increase either.

Being rural vs urban aren't the only determining factors in the cost of cell phone service. Many cell towers are already built in the US and a large chunk of the upfront cost is already out of the way. Naturally the expense should decrease over time as the same towers continue to provide service (except in urban areas where towers need to be upgraded or added to provide more data throughput). It makes zero sense that American's would pay significantly more now then when the towers were being built and the costs of business were high. Just as there are factors that may increase the price like the one you pointed out, there are also factors that drive down the price.

In fact in my state Verizon is in legal trouble for failing to use public money to expand their network. Our bills have continued to go up yet the cell service in anywhere but the cities is garbage. It's not hard to believe that companies will seek to abuse the system. In fact, that's been recognized as a basic understanding ever since the industrial revolution. It's hard to ignore all the red flags.

 

[MilwaukeeMike]

Not to sound like a broken clock here, but you've afforded no proof that the sole reason American's pay four times as much for cell service can be attributed solely to expendable income. This is a good point and Americans do love their phones but it needs to be backed up with data.

You're asking for data to prove that the ONLY reason people spend so much on data is because they have extra money. (called 'disposable' income, not 'expendable'). That's impossible. You can't prove everyone is making decisions for the same reason.

However, it's obviously true because it's happening. If people didn't have the means, they couldn't buy the data, and since they ARE buying the data, they're obviously choosing to.

 

[Evernessince]

You're asking for data to prove that the ONLY reason people spend so much on data is because they have extra money. (called 'disposable' income, not 'expendable'). That's impossible. You can't prove everyone is making decisions for the same reason.

However, it's obviously true because it's happening. If people didn't have the means, they couldn't buy the data, and since they ARE buying the data, they're obviously choosing to.

lol, disposable and expendable and synonyms. I could care less what you prefer to call it, they are the same. The only difference between the two is that disposable has a more negative tone while expendable is used in financial settings and thus has a more formal tone. Why you see fit to correct other's perfectly fine diction choices is beyond me.

On point, if Americans don't have the means they put it on their credit card as seen by the continuing increase of debt in America. It's not like many people have a choice either, you need a cell phone in modern society. Don't confuse a transaction as consent. There are many examples of money changing hands based on necessity and not want.