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Wireless carriers are wringing more money out of customers than previous years

One of the reasons that the FCC wants at least four major carriers in the U.S. wireless industry is for greater competition. The general hope is the increased competition will lead to lower prices for consumers, but that well-meaning sentiment isn’t exactly going according to plan.
 
Carriers aren’t competing aggressively on price and are pushing users to gobble up as much data as possible according to a new report from The Wall Street Journal. Carries are also working hard to eliminate smartphone subsidies. "As you approach 90 percent penetration, you move into maintenance mode. That means more device upgrades,” AT&T CEO Randall Stephenson stated in December. “And the model has to change. You can't afford to subsidize devices like that."
 
T-Mobile increased the price of its unlimited data plan by $10 on Friday. Rather than competing on price, the carrier says that it is removing what it calls "pain points" like service contracts and international data rates. Executives at the company don't want to start a price war.
 
"When you really analyze a lot of the pricing moves that have been made, there has not been a significant repricing," said T-Mobile Chief Financial Officer Braxton Carter.
 
The average monthly revenue per postpaid users for wireless carriers has grown across the wireless industry by 2.2% to $61.51 in Q4 2013 according to New Street Research. That is an increase of $5 per user compared to Q1 2010. The result of new pricing plans and increased data consumption by wireless subscribers in the U.S. is that revenue has rose 0.9% in Q4 compared to the previous year. That increase is a reversal from long running declines in the industry.
 
"It has gotten a little more competitive lately, but it isn't effectively competitive yet where the big two have to lower prices,” said Matt Wood, Policy Director for public advocacy group Free Press.

Source: WSJ



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I want a price war.
By quiksilvr on 3/10/2014 10:50:04 AM , Rating: 2
I feel if we can get unlimited global everything with LTE for $50 a month (no data caps, no tethering caps), unlimited global everything with 2G for $30 a month, and unlimited talk and text (SMS and MMS) globally for $20 a month, we will be at a good spot.

Keep it simple. No phone cards, no pointless apps counting how many MBs you are using, no contracts, no roaming, no more nonsense. Lets integrate the world without placing limitations on how we communicate with one another.




RE: I want a price war.
By russki on 3/10/2014 11:11:58 AM , Rating: 2
With the new att pricing I went from $120/mo with 6gb data
to about $100/mo with 10gb data. I would like to see phone subsidies go away, so I can just purchase my own phone and to have monthly fees in the 50~70$ range.


RE: I want a price war.
By Reclaimer77 on 3/10/14, Rating: -1
RE: I want a price war.
By inighthawki on 3/10/2014 11:34:09 AM , Rating: 5
How so? The data plans in the US are designed around getting a subsidized phone. Even if you buy a smartphone at full price (separately), you are still paying a premium on the plan.


RE: I want a price war.
By GotThumbs on 3/10/2014 12:00:10 PM , Rating: 2
Page-Plus via KittyWireless. 1200 talk and text for $29.99 mo. 1200 talk, 3000 text and 500mb data.

Uses Verizon network and you bring your own phone. Some limits on adding the newest phones, but thats to prevent more people moving away from Verizons contracts.

Knowledge is power.

Check Clark Howard forums regarding cell phone deals.

~Best wishes


RE: I want a price war.
By Rukkian on 3/10/2014 2:20:34 PM , Rating: 2
That is fine for dumb phones, but for smart phones, Verizon's 3G is almost unusable (and that is from a very long time Verizon user). Add to that 500mb is really nothing, so unless you are just using your smart phone as a dumb phone (ie not really using it), or only using it on wifi (why not just get a dumb phone and tablet and save even more at that point?) that plan is horrible.


RE: I want a price war.
By StevoLincolnite on 3/10/2014 6:42:57 PM , Rating: 2
I pay $35 a month and get unlimited calls, unlimited text, unlimited social networking (Facebook, twitter etc') and I own my Lumia 920 outright.

On top of that I get 1,500mb of data a month, which is more than enough for my needs (I would probably only use 200Mb of that), I'm not exactly a "light user".
I'm lucky enough though in my situation to have land-line Wifi to tap into at work, at friends and at home, the only time I tap into that data is on the road. (And living in a small town, isn't something I spend hours on.)

So, it depends on the users personal needs/situation as to whether they need 500mb of data, but don't assume it's useless unless people use their smartphone as a dumb phone.

Paying upwards of $70-$100 a month for just a mobile phone plan though? That's nuts.
The irony is, here in Australia we actually have *less* competition than the USA and it seems our prices are lower across the board. - If you shop around to other providers rather than the default monopoly. (whirlpool.net.au is your friend in that regard.)


RE: I want a price war.
By DaveLessnau on 3/10/2014 1:39:44 PM , Rating: 2
quote:
How so? The data plans in the US are designed around getting a subsidized phone. Even if you buy a smartphone at full price (separately), you are still paying a premium on the plan.


Buy the phone here:

https://play.google.com/store/devices/details?id=n...

And go pre-paid:

- http://www.prepaidreviews.com/compare/

Note: I can't vouch for that prepaid review site -- I just found it by searching. But, it does give you an idea of what's available.


RE: I want a price war.
By Reclaimer77 on 3/10/14, Rating: 0
RE: I want a price war.
By Jeffk464 on 3/10/2014 3:55:14 PM , Rating: 2
Starting at $30 through walmart.


RE: I want a price war.
By synapse46 on 3/10/2014 11:58:17 AM , Rating: 2
TMobile did this, but last I checked if you added the price of a phone with their "lower" monthly payments the subsidized payment was still a better deal.


RE: I want a price war.
By Jeffk464 on 3/10/2014 3:57:18 PM , Rating: 2
It was cheaper to buy my nexus outright than to pay the $20 or so contract fee for the same phone. $20 X 24 = $480


RE: I want a price war.
By Reclaimer77 on 3/10/2014 5:14:14 PM , Rating: 2
The Nexus is far and away the exception. Most phones with those stats are like $700.


RE: I want a price war.
By Dr of crap on 3/10/2014 12:28:08 PM , Rating: 1
SO in one year or less, when your phone is outdated, you can upgrade, and then again in one year, and again when ever you like, ACTUALLY making your outlay MORE than if you had to stay with them for two years WITH a phone cost added on!

I'D like it to stay how it is. Putting out $500 plus for a phone for a reduced monthly cost just doesn't do it for me -
UNLESS the NEED to upgrade goes away because the phones are good enough to last a 3-5 years! Then yes.


RE: I want a price war.
By SAN-Man on 3/10/2014 2:25:52 PM , Rating: 2
Are you stupid? Survey says yes. A phone is not outdated after 1 year. I am going on 3 years on my HTC Evo V 4G. There is absolutely no reason for me to upgrade it. It does everything a newer phone does. Oh, and it was $137 BRAND NEW from Virgin.

Get a clue, stop spreading fudd. What, do you work for ATT?


RE: I want a price war.
By Dorkyman on 3/11/2014 11:59:52 AM , Rating: 2
Funny, I was going to respond and then noted you had an Evo4G. I do, too. So does wife. I have a spare in the closet, cloned and ready. I greatly depend on my phone and if I lost it or ran over it with the car I could be back in business in an hour.

The 4G was revolutionary when it came out a few years ago. Even today it's a very good phone, and I picked up my spare for $75 on eBay. Newer phones are thinner. BFD to me.

BTW we are on Ting (Sprint network). Combined monthly bill for two heavy users ~$72.


RE: I want a price war.
By Dr of crap on 3/11/2014 12:43:30 PM , Rating: 2
Well you can kiss...
Do you have your head in the sand.

All you hear is the amount of "users" breaking their plans and paying EFTs to switch, I wouldn't do that but I guess it happens a lot!

New phones come out every 6 months in a got to have it kind of thing. Again I keep mine for 2-3 years before I upgrade. So what's your point???

MY POINT - all this does it make it very expensive for those mindless fools out there that will upgrade every year or less. Yes it will affect us in the cost that these fools will need to be bailed out of by the carriers, will most certainly be with INCREASED cost to the rest of us!
I don't know of to many people that will be able to keep shelling out $500 plus every 6 months for a new phone. Yes they are that much. Do you pay attention to the cost of these things!?!?!


RE: I want a price war.
By BRB29 on 3/10/2014 12:51:04 PM , Rating: 1
quote:
With the new att pricing I went from $120/mo with 6gb data
to about $100/mo with 10gb data. I would like to see phone subsidies go away, so I can just purchase my own phone and to have monthly fees in the 50~70$ range.


Then join Tmobile lol

for $50, you get 1GB LTE data and unlimited everything. You bring your own phone you can buy an unlocked phone from them at 0% APR.


RE: I want a price war.
By eagle470 on 3/10/2014 11:13:43 AM , Rating: 2
It really sounds like your shilling for AT&T....

Maybe it's the flu jacking with my head, but thats how I read this.


RE: I want a price war.
By SteelRing on 3/10/2014 12:29:57 PM , Rating: 2
Did you really think they're going to give you a plan that will net them less money and actually not give you sh1tty service? What world are you living in.


RE: I want a price war.
By SAN-Man on 3/10/2014 2:22:46 PM , Rating: 3
$50 is too much , especially with a contract service where you know it will actually be $60 after fees.

I am happy with my $35 ($38 with tax) service from Virgin and my HTC Evo V 4G. Unlimited 4G/3G, Unlimited messaging, 300 minutes.


TracFone
By HoosierEngineer5 on 3/10/2014 11:25:40 AM , Rating: 3
$8.33 per month, no contract. Not unlimited, but I don't talk that much. At work, I have a telephone.




RE: TracFone
By Vertigo2000 on 3/10/2014 11:37:10 AM , Rating: 2
Exactly. I'm on a Pay-As-You-Go plan. A $100 phone card lasts me about 11 months. I have a landline at home and at work. Personally, I can't justify spending $60-80/month just to have a smart phone.

That being said... you and I are probably different than most people. I know many who need their smart phones for work.

Also, even if someone doesn't need a smart phone and are throwing away money every month, it's their money to do as they please. If the smart phone makes them happy, who am I to complain? I waste money on other stuff.


RE: TracFone
By MrBlastman on 3/10/2014 11:47:57 AM , Rating: 2
I have a phone and computer at home. I have a phone and computer at work. If I am not at either place, I am either at the store, driving a car or spending time with my family somewhere. None of those scenarios allow me to use a smartphone. So I don't. :)

I do pay 30 bucks a month for a pre-paid phone, though. It is all I need, really.


RE: TracFone
By Schrag4 on 3/10/2014 2:02:33 PM , Rating: 2
Pretty much sums up what I do too. I pay far less than $30 per month for my prepaid, though. I spend $100-$150 once a year to add minutes to it.


RE: TracFone
By inperfectdarkness on 3/10/2014 3:54:48 PM , Rating: 2
If only we had a pre-paid plan that didn't have monthly or daily fees...or maintenance charges. Pay per text or minute used. That's costing me all of about 50 euro annually.


Pay As You Go
By mgilbert on 3/10/2014 1:22:54 PM , Rating: 2
If you have a two year contract, you are paying $35 to $60 a month extra for your phone, which means you are paying $840 to $1440 for your phone, and that is just plain foolish.

I bought my wife a nice phone for $300. Her Straight Talk plan, which uses AT&T, is $45 a month for unlimited everything. If her phone only lasts two years, that's $12.50 a month for the phone - so she is paying $57.50 a month for unlimited everything and the phone.

I despise people who stare at their phones in the presence of others, instead of interacting with those around them. I have a $30 phone, and get 200 minutes of text/talk a month for $15. Truth be told, that's all most people need. Go with a plan like mine, and put your phone away when you are with others!!!

Spending $100 a month or more for a phone is just stupid - unless you just HAVE to have a new phone every year, and if you think you just HAVE to have a new phone every year, you pay a stupidity tax!




RE: Pay As You Go
By Rukkian on 3/10/2014 2:29:39 PM , Rating: 2
Trying to tell others what they need based off your needs is kind of silly. Obviously everybody could get by without a smart phone (save needing it for their job), and could probably even get by without a high minute plan or texting, they could also get by without a dishwasher, tv, radio, car (in some circumstances), electricity, etc, etc, etc.

While you may not want/need a smart phone, that does not mean others do not value that service. I personally have a 60 mile commute each way to work. I ride a vanpool for 35 miles of that, and am stuck in a van with 13 other people that I didn't choose. To keep my sanity, I need something to pass the time, so I use my phone and watch netflix to drown out all the useless conversations going on. According to your logic, I should now say everybody should have one since I feel the need for one.


RE: Pay As You Go
By SAN-Man on 3/10/2014 3:14:11 PM , Rating: 2
It's so easy yet people don't do it. I'm amazed myself. I'm on Virgin Mobile now with a fully functional smart phone, unlimited 4G data, 300 minutes. I pay $38.xx all taxes included.

I have an 800 credit score and could easily afford an expensive contract service and expensive subsidized phone, but why? It doesn't make any sense at all to pay that much for a PHONE.

I suggest people read "The Millionaire Next Door".

People are just throwing money away these days.


Why spend more than you have too?
By GotThumbs on 3/10/2014 11:57:20 AM , Rating: 2
I've been using Page-Plus via Kitty Wireless for over 3 years now. $29.99 per month with auto billing. The service uses Verizon's network and has no contract. Using the 1200 talk, 3000 text and 500mb data plan.

Sure, I have to buy/bring my own phone, but I've been very pleased with the service and the fact that i keep more of my money in my pocket is it's own reward.

~Best wishes keeping what you earned.




By DanNeely on 3/10/2014 12:12:25 PM , Rating: 2
Unless something has changed recently, also only VZW's 3g network which is a major downer when they've got LTE coverage almost nationwide.


What hasn't gone up under FCC control
By rocketcuse on 3/10/2014 10:55:03 AM , Rating: 1
I think the title says it all...What hasn't gone up under FCC control?

Though, my cell bill did just get cut in half. Sure I will be "paying" for it come next year or when I upgrade my phone.




By FITCamaro on 3/10/2014 12:22:38 PM , Rating: 2
Because the government has no business dictating pricing for a service that is a luxury. If you don't like how much it costs, don't pay for it. Pure and simple.


I just got 4 words:
By Shadowmaster625 on 3/10/2014 11:07:50 AM , Rating: 2
ring plus and ting




making a profit.
By drycrust3 on 3/10/2014 11:25:19 AM , Rating: 2
quote:
The result of new pricing plans and increased data consumption by wireless subscribers in the U.S. is that revenue has rose 0.9% in Q4 compared to the previous year.

As I see it, the important point here is the rate of inflation in the USA for 2013 was roughly 1.6%, meaning a Q4 rise of prices of about 0.4% was probably to be expected anyway, so the remaining 0.5% is increased revenue. This is actually good news.
A phone company mostly gets revenue only from their paying customers, so it is important that you profit from as many of them as you can, that way you distribute the burden of running your network more evenly over as much of your paying customers as you can. You should profit from every paying customer (special circumstances excepted).
The increased revenue of 0.5% says suggests that is what is happening.




It's a Cartel...Competition My Ass
By Arsynic on 3/10/2014 12:07:28 PM , Rating: 2
If you want coverage that isn't absolute crap, then you have no choice but to go with certain carriers. For example, where I live, T-Mobile is garbage.




By DanNeely on 3/10/2014 12:15:57 PM , Rating: 2
I'd suspect a substantial amount is still coming from feature to smart phone upgrades.

I'd be curious what it looks like if you split customers who were moving up to smartphones from those who've kept the same phone type over the same period. While they're potentially able to keep squeezing more money out of heavy users as data levels keep going up, the proliferation of lower cost plans with small data caps is providing potential savings to light users who previously had to buy a big plan whether they wanted it or not.




By Spookster on 3/10/2014 2:49:48 PM , Rating: 2
agreed
By petermarker on 3/11/2014 9:04:32 AM , Rating: 2
Ironically I've noticed that it's been decreasing greatly in other countries.

For example in Romania, a friend pays ~$13 for ~3000 minutes, unlimited text, 2-3GB 3G, and even a few hundred international minutes.

The prepaid companies are likely the only factor that can drive prices down eventually.

By the way if looking into prepaid, there is an index with 50 or so providers and plans organized by network http://www.allprepaidplans.com




By EricMartello on 3/12/2014 6:39:47 PM , Rating: 2
This article is somewhat misleading in the sense that it suggests that basic economics principles are failing - more competition not resulting in lower prices.

The issue is that telecom is a socialized industry, meaning that it is state controlled via the FCC. The private companies that operate telecom services require extensive licensing and no shortage of political favors in order to have the privilege of setting up and maintaining wired networks as well as wireless towers.

You cannot just buy a plots of land throughout a city and erect your own cell towers - no, that would not work. You'll need to cut through swathes of bureaucratic red tape just to have your plan considered. In other words, if you are not already one of the major telecom providers you will not be able to get into this industry.

These strict and extensive regulations on who can do what with telecom severely limit new business and new ideas from taking root, and even though you can buy mobile phone service from providers other than AT&T or Verizon, these lower tier providers are leasing bandwidth from either AT&T or Verizon - so in essence, they are simply reselling access to the same telecom resources and are thus limited in how flexible they can be with their prices.




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