Photo (cc) by Melina Manfrinatti
When it comes to the quality and affordability of cellphone service, Americans seem to be getting the shaft.
According to The New York Times, American cellphone service is expensive. In fact, it’s among the most costly in the world.
If you compare a cellphone plan in the U.S. with a similar plan in Britain, there is a significant difference in cost. For instance, an iPhone 5S with 16 gigabytes of memory, 2 GB of data, unlimited voice and texting, and a two-year commitment costs about $109 per month in the U.S., according to the Times. A similar plan in the U.K. offers unlimited data and still comes in at just $68 per month.
So why the hefty price difference? The Times said:
Several factors are involved, but an important one is regulatory policy. Britain has forced companies to lease their networks to competitors at cost. The United States has not, allowing a formidable barrier against competitors.
“The United States lacks meaningful competition in its cellular market sector, which leads to higher cell plan prices than a growing list of other countries,” said Sascha Meinrath, founder of the Open Technology Institute at the New America Foundation.
Smartphone news site AndroidCentral argues that simply looking at the cost doesn’t tell the whole story. While U.S. consumers are paying big bucks for a cellphone plan, it’s still a relatively small percentage of their income.
When looking at countries that have mobile data prices under 2.5 percent of [gross national income], the U.S. is back in familiar company with Canada, Mexico, most all of Europe and Russia. Though these cheaper European plans may be in the range of 0.5 to 1 percent of GNI and therefore still dramatically cheaper than the U.S., those of us in the states may not have it as bad as we might think.
Still, Americans continue to pay more for their cellphone plans than their counterparts across the globe, even though the service might not be as good. And it doesn’t look like things will change anytime soon.
“Over the next decade, U.S. consumers may overpay by over a quarter of a trillion dollars for worse levels of service than customers in other countries receive,” Meinrath said.
Are you surprised to see how much more Americans pay for cellphone plans than consumers in other countries? Share your comments below or on our Facebook page.