Average Mobile Phone Bill in U.S. is Growing Despite Competition
March 10, 2014 10:25 AM
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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.
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Pay As You Go
3/10/2014 1:22:54 PM
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
3/10/2014 2:29:39 PM
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
3/10/2014 3:14:11 PM
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.
"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov
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