TELECOM Digest OnLine - Sorted: Re: America the Worst For Cell Rates and Plans

Re: America the Worst For Cell Rates and Plans

Isaiah Beard (
Thu, 27 Jan 2005 13:53:45 PST

> America has the best mobile telephone calling rates and plans in the
> world, except maybe for Canada.

> For example, for $30/mo I get a package that includes more calls than
> I ever make, both incoming and outgoing, and I can call anywhere in
> the country at no charge.

It's obviously not at no charge, You've already prepaid the
minutes. The reality is that most Europeans have a much cheaper
service. The monthly fee can be as low as $2 for low volume use and $4
for higher volume use. Per minute charges can be around the $0.06-0.08
mark (in todays unfavorable exchange rates). By comparison according
to JD Power & Associates, cellphone calls have fallen to 11 cents a
minute, from 56 cents in 1996 (I got this at That's probably
because so many minutes you haven't used are prepaid. You never get
that back. Rollover packages appearing now, will remedy this problem.

So simply comparing how many minutes you get with how much that would
cost a European is misleading. But as you see the cost is falling and
I'm sure we'll soon match them. Where US has an advantage is in the
roaming and long distance charges. As long as you stay on your network
(increasingly possible now with better network deployments), you pay
nothing with most plans and long distance is included, not to mention
unlimited mobile to mobile calls. I have a hunch (although I can't
prove it) that this ends up as a much better deal for businesspeople
and other high volume users and frequent travelers compared to their
EU peers who pay through the nose. For the average person though (low
use, low mobility outside home area), it's more expensive here than in

I also think that the knowledge that you are depleting somebody's
minutes when you call them (a bit like a collect call would charge the
called party), makes people hesitant to call someone on their cell,
unless they have to (assuming they know it's their cell number they
have). I think this is (a smal) part of the explanation why cell phone
use was slower to take off here than in Europe. Conversely, the
billing structure for local calls many mention made internet use take
off faster here (until the Europeans figured that one out and offered
cheaper calling rates when dialing up).

Finally either billing system is certainly a legitimate option which
came out of the particular regulatory (and to a lesser extent
technical) realities of each market. But I must say, I would rather
pay for what I use as opposed to pre-paying for what I might use. As
for having the caller charged extra for calling a cell phone, I see
nothing weird about that. They are accessing a valuable service,
i.e. the ability to call someone as opposed to something (in reality
when you call a fixed line, you are only calling a physical location,
not the person who may or may not be there). I, the subscriber of cell
phone service, will pay for the priviledge of mobility via my monthly
fee. So in this way both caller and called pay for use and service,
each their own part (they are both using it are they not?).



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