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 2:25:52 PM
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 A phone is not outdated after 1 year.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.
3/11/2014 11:59:52 AM
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.
Dr of crap
Dr of crap
3/11/2014 12:43:30 PM
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!?!?!
"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
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