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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RE: I want a price war.
3/10/2014 2:20:34 PM
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.
3/10/2014 6:42:57 PM
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.)
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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