In a study surveying 30 countries’ cell service costs, the Organization for Economic Cooperation and Development (OECD) found that Americans pay the most for their cell phone plans.
America: Land Of The Most Expensive Cell Service?
The study monitored how much they spend on average per year on their cell phone service, including minutes, long distance, roaming, text messaging, internet access, tax and any other extra charges which may be applicable.
Here were the findings: (in order from highest to lowest)
Countries that pay the highest :
- The United States (No surprise here)
- Spain
- Canada
Countries that pay the lowest:
- Sweden
- Finland
- The Netherlands
When I first read over the bullets and overview of this report I thought to myself “Is the difference really that big?” After all, I know how many studies can often be misleading.
Maybe the reason we pay so much in the US is because we are getting more for the amount we pay. In other words, Americans are always on their phone, so that made sense to me. This is far from true though.
In the study, they compare “low, medium and high usage packages.” I’ve picked “medium-use package” as an example of the stark differences between cost of coverage.
A “medium-use package” included 780 voice calls, 600 text messages or SMS and 8 multimedia messages or MMS (pictures, videos, etc). When comparing a “medium-use package”, a consumer in the United States would pay $53 a month, while a consumer in the Netherland would pay a miniscule $11 a month!
Here is what it looks like on a yearly scale:
- American cell phone users: $635.85 (sadly mine is a lot more than that)
- Spanish cell phone users: $508.26
- Canadian cell phone users: $500.63
- Swedish cell phone users: $137.94
- Dutch (Netherlands) and Finnish cell phone users: $131.44
We, American, on average are paying almost 5 TIMES the amount that the Dutch and Finnish are paying and I, personally am paying a lot more than that!
So the question arises, are Americans being ripped off for cell phone service?
In short, yes. To start, profit margins are huge. This is especially true with texts. Carriers can charge up to .20 cents for each text if you don’t buy a bundle package. The actual costs to carriers for text messages are negligible if measurable at all.
Then there are all of the additional taxes, surcharges and government fees added to the plan.
Here are some of the government fees, which begin to really add up (but you can’t go blaming your carrier for em):
- Fed Universal Service Charge: $2- $3 monthly- FCC telephone service fee that goes to your city- funny thing is though the carriers are suppose to pay it, so in turn they charge you for it. (Mine is 12.3% monthly per line)
- E911 Service Surcharge: .20- .30 cents- Goes to local government for emergency services.
- State Sales Tax: Cost varies according to residence- broken down by state and city.
- Gross Receipts Surcharge: Costs varies according to residence- another version of state and local taxes. (My provider states the above 3 are between 5% and 37% monthly)
So we’re clearly being ripped off.
What can you do about it?
Many sites tell you “If you are using one of the main carriers (Verizon, AT&T, TMobile or Sprint) you probably could be paying less”. I am guilty as charged here. I use one of the main four, but the idea of using some obscure network kind of scares me. I like having reliability, which means knowing that I will get service everywhere and that they aren’t going to go bankrupt.
Will Americans switch over to more inexpensive services to help tighten their wallet with this economy? It’s hard to say.
Some people think that prices will only continue to increase as new technology and faster networks come out. We Americans always want the best and the latest so we may just have to accept the higher rates as our technology continues to grow.
