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Wireless Phone Service Prices Skyrocket
According to a study from California consumer advocates...
by Karl Bode Monday 09-Mar-2009 tags: prices · business · wireless · consumers
Tipped by yt See Profile
Greg Lazarus of the Los Angeles Times points to a new study that claims the average cellphone user actually pays about $3 per minute for wireless service. That's according to a new study by the Utility Consumers' Action Network, who came to that number by comparing the average number of minutes charged in more than 700 San Diego consumers' telecom bills and dividing by the average number of actual minutes used. That number is seriously skewed by consumers paying for much more service than they use, though the study also notes the price of call waiting has jumped 86% since 2004, the cost of an unlisted number is up 346%, and the cost of directory assistance has increased 1,630%.

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Goober
Premium
join:2000-12-17
Naperville, IL
kudos:4

What the market bears

is what a busines will charge.

hamburglar_

join:2002-04-29
united state

Re: What the market bears

As long as everyone has the latest phone, I don't think they care what they pay per month. It's just like new car syndrome.
devnuller

join:2006-06-10
Cambridge, MA
Reviews:
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1 edit

Re: What the market bears

But people shop for new cars and there is enough competition that the margins are relatively low on new cars.

With cell phones there is also a fair amount of competition, but the prices still remain high. Does competition work in the wireless space?

When you can get TV (with all the content costs), Internet and land line for less than your family cell phone bill, something's not right.

Edit: Found on Reddit: »www.billshrink.com/blog/mobile-c···-markup/

tiger72
SexaT duorP
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Saint Louis, MO
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1 edit

Re: What the market bears

said by devnuller:

But people shop for new cars and there is enough competition that the margins are relatively low on new cars.

With cell phones there is also a fair amount of competition, but the prices still remain high. Does competition work in the wireless space?

When you can get TV (with all the content costs), Internet and land line for less than your family cell phone bill, something's not right.

Edit: Found on Reddit: »www.billshrink.com/blog/mobile-c···-markup/
Wait a couple years for LTE and that'll change. You'll be able to pay for your home's TV, Internet, and wireless all on your cell phone bill.
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hamburglar_

join:2002-04-29
united state
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What I was stating was that people get this glazed over look and freely sign a 2 year contract for an overpriced service because they are getting something new. If people would stand back and refuse to pay a minimum of $40/month for basic phone service, they may affect the market prices. Until then, it's a free for all with the cell companies. It's the exact reason I use prepaid, which for casual users, is much cheaper and there's no contract.
RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11
said by hamburglar_:

It's just like new car syndrome.
And look how spectacularly the auto industry is doing right now...

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
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join:2002-02-02
Stewartstown, PA
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said by Goober:

is what a busines will charge.
With collusion between the carriers and long term contracts the norm, it makes it hard for true competition to exist.

Goober
Premium
join:2000-12-17
Naperville, IL
kudos:4

Re: What the market bears

If there's collusion, then of course it all breaks down.

KrK
Heavy Artillery For The Little Guy
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True, but there's also legal issues and barriers to entry that allow the market to be distorted and a business to charge artificially high prices.
--
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Goober
Premium
join:2000-12-17
Naperville, IL
kudos:4

Re: What the market bears

said by KrK:

True, but there's also legal issues and barriers to entry that allow the market to be distorted and a business to charge artificially high prices.
I'll agree with that. It's not a true free market in the sense that vegetable sellers at a farmers market are competing against one another.

But, in the long term, I don't think that if people are disatisfied and speak with their wallets, that a business can survive--even if the logistics favor the incumbants.

fifty nine

join:2002-09-25
Sussex, NJ
kudos:1

The cheap plans are gone.

I use maybe less than 100 minutes per month, and the cheapest plan I can get is 700 minutes.

Dezbend
Premium,MVM
join:2001-04-20

Re: The cheap plans are gone.

My wife and I were on a shared plan with 800 minutes (the smallest we could get on a family plan), but were only using around the same as you (between the both of us). Our contract was up so we cancelled and went to WalMart and picked up a couple pre-paid phones. We have to put more minutes on them every 2 months or they go inactive... as long as I keep the phone active the minutes don't expire, so paying for 2 pre-paid phones versus the family plan I had, I figure I am going to save over $1,000 a year and still pay for minutes I wont use, but at least I wont lose them, so if I go traveling or something I will have a stock pile.
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hamburglar_

join:2002-04-29
united state
Reviews:
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Re: The cheap plans are gone.

I was going to say the same thing. Get a T-Mobile prepaid if you can live with their more limited coverage. In urban areas and major highways, I've never had a problem. With the 1000 min card for $100 or less, you are only out about $8/month and no contracts.

fifty nine

join:2002-09-25
Sussex, NJ
kudos:1

1 edit

Re: The cheap plans are gone.

I'm just going to cancel altogether. I really don't need a mobile phone and I have a phone from work, and they don't mind the occasional personal phone call.

T-Mobile is out as they have no coverage where I live. They fought the town for 2 years to put up a tower, and I don't think they're going to try to put up any more.
dentman42
Premium
join:2001-10-02
Columbus, OH
said by hamburglar_:

I was going to say the same thing. Get a T-Mobile prepaid if you can live with their more limited coverage. In urban areas and major highways, I've never had a problem. With the 1000 min card for $100 or less, you are only out about $8/month and no contracts.
You forgot to mention that once you spend $100 on refills, your minutes are all good for 365 days, with rollover. I bought my T-Mo prepaid in 2006, got 30 minutes good for 90 days, bought a $100 refill at the end of that 90 days, then at each anniversary since I've added a $10 refill to roll over for another year. I've still got over 700 minutes left.
AVonGauss
Premium
join:2007-11-01
Boynton Beach, FL

Whacky Numbers

I don't know whats worse, the rates that cellular carriers charge for some services (SMS, data) or advocacy groups using spooky numbers that just don't add up. Cellular companies are pretty easy targets, I don't think its necessary to get too creative to find ways to criticize them.

cdru
Go Colts
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Fort Wayne, IN
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Re: Whacky Numbers

said by AVonGauss:

or advocacy groups using spooky numbers that just don't add up.
That's the great thing about statistics. You can easily manipulate them to suit your needs. The data doesn't even need to support your point of view...it can be made to appear as if it does.
iansltx

join:2007-02-19
Golden, CO
kudos:2
Reviews:
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Prepaid?

Seriously people, if your usage patterns don't fir your bill by that large a margin, get prepaid service or change your plan. I'm now on a contract (and use my plan...mostly data...enough to justify the cost), but my parents and brother use prepaid. Brother uses very few minutes a month (a few dozen, tops) and thus gets docked about $7 per month to keep the phone active. My parents use their phones more, but the combined cost per month is maybe $40 per month, if that

Hate to toot my own horn, but I actually have a few sites about this sorta thing:

»go4prepaid.net
»forums.go4prepaid.net

JohnInSJ
Premium
join:2003-09-22
San Jose, CA
Reviews:
·PHONE POWER
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Well, I guess people are worried about going over?

My plan is under $90 for 3 lines, with txt, data, and 550 minutes shared - unlimited n&w and m2m...

Looking at this month...

used 200 minutes total so far with 10 days left in the cycle - but nearly a GB of data, and thousands of txts.

If we just figured the cost per voice minute, it would be $0.45/min. But seriously, the voice use is almost an afterthought

Sounds like a bogus study. Or one that needs to view the complete picture, more then just minutes.
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MrMaster
jetsetter
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St Thomas, VI
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Re: Well, I guess people are worried about going over?

said by JohnInSJ:

My plan is under $90 for 3 lines, with txt, data, and 550 minutes shared - unlimited n&w and m2m...

Looking at this month...

used 200 minutes total so far with 10 days left in the cycle - but nearly a GB of data, and thousands of txts.

If we just figured the cost per voice minute, it would be $0.45/min. But seriously, the voice use is almost an afterthought

Sounds like a bogus study. Or one that needs to view the complete picture, more then just minutes.
what company are you with?
-what plan do you really have

I'd say you are a special situation. My bill is $90 for my blackberry and it's just me!
RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11

Re: Well, I guess people are worried about going over?

I've got AT&T and mine is about what his is. Three lines...$50+$10+$10=$70 for 550 shared minutes, and over 4000 rollover banked. Comes out to about $25 per phone after taxes. My data plan is an additional $20 so the entire bill is right around $90 per month.

JohnInSJ
Premium
join:2003-09-22
San Jose, CA
Reviews:
·PHONE POWER
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said by MrMaster:

what company are you with?
-what plan do you really have

I'd say you are a special situation. My bill is $90 for my blackberry and it's just me!
Sprint. Visit sprintusers dot com, you'll find lots of people like me.
Family share plan, three lines. I get a corporate discount (25%) - sprint has relationships with most fortune 50 companies providing similar discounts. It's true I have been with sprint for nearly 10 years, so I've received a few discounts, but its not hard at all to put togeather a decent family share plan for 3 lines for $100 or so ($33/ea) with a corporate discount, with 500+ shared minutes on Sprint.

MrMaster
jetsetter
Premium
join:2000-12-16
St Thomas, VI
Reviews:
·Sprint Mobile Br..
·Virgin Mobile Br..

Re: Well, I guess people are worried about going over?

said by JohnInSJ:

said by MrMaster:

what company are you with?
-what plan do you really have

I'd say you are a special situation. My bill is $90 for my blackberry and it's just me!
Sprint. Visit sprintusers dot com, you'll find lots of people like me.
Family share plan, three lines. I get a corporate discount (25%) - sprint has relationships with most fortune 50 companies providing similar discounts. It's true I have been with sprint for nearly 10 years, so I've received a few discounts, but its not hard at all to put togeather a decent family share plan for 3 lines for $100 or so ($33/ea) with a corporate discount, with 500+ shared minutes on Sprint.
Ah, okay. Sprint has had some great specials throughout.

Yeah, I have no intentions of going to Sprint.

RadioDoc, I take it that is a plan that was offered many moons ago? I can only bank 1 years worth of rollover and my data plan is higher cause it's a blackberry. The only thing i save on is $5 on text messages since the plans changed again a few months back.
bgraham

join:2001-03-15
Smithtown, NY

I cancelled mine last year.

I averaged $4 a minute on my cell. ($35 divided by 8 minutes)
I bought a prepaid phone and a $20 200 minute package.
My wife at least uses 100 plus minutes on her 200 minute plan so the cost there is about 35 cents a minute.

otty

join:2008-10-24
Revelstoke, BC

Re: I cancelled mine last year.

I'd use the 7-eleven speakout wireless. 15 cents per minute, 1 year expiry on credit and it's on AT&T network. I use it in Canada. More expensive here but still the best deal for low usage.
amungus
Premium
join:2004-11-26
America
Reviews:
·AT&T DSL Service

1 edit

U.S. Cellular

Guess I have an alright deal... ~$120/mo. for 1400 anytime, 7pm nights/weekends, mobile-to-mobile, texting on 2 lines... Use an average of 1000 minutes a month total so that's what, about $.12/min. on average - not bad, certainly better than $3/min!!!

-edit-
for 3 lines on a family plan...

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Hard to Believe

I remember the "good old days" of $15 a month wireless. It got me about 30 minutes a month. Then of course there was the 99 cent a minute roaming, the ridiculously overpriced long distance, the extra. At that price point, the cell phone wasn't exactly a useful thing to have. Unless I was willing to pay a lot more money, I would have to have a landline phone if I wanted to be able to communicate.

I now pay about $60 a month for 2 cell lines. No roaming, no long distance, unlimited mobile to mobile. All those things make the cell phone a much better value for the money, and I am not paying any money for an additional landline.
--
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ReVeLaTeD
Premium
join:2001-11-10
San Diego, CA

Problem with wireless

Is that they don't have enough variety in plan types.

I'm on Verizon, two lines of service: One is a phone, the other a data card. The phone I use primarily for data and email, but need a small amount of voice minutes, maybe 100. Verizon offers no such voice plan, and for the data I'm forced to pay almost double the other carriers for the reliability trade-off.

Then the data card can be reasonably priced at around $40/month, but that doesn't get you enough data and you're charged per-MB after that, resulting in quite a high bill. Meaning I'm forced to go with the 5GB plan for $60. How about a 1GB plan for $30? Nope.

Both result in a bill that fluctuates between $110 and $200 a month. I can't really do anything about it, because T-mobile are crooks, Sprint is still spotty with customer service, and prepaid does not offer data.
pacojoebob

join:2004-05-03
Temple City, CA

Re: Problem with wireless

Try to go with the Senior Plan. $30 a month 200mins, 500 N&W unlimited M2M. I'm no where near the age but they gave it to me. I was told about this by a sales guy in the Verizon store. To bad I'm actually using my phone more now, I might upgrade my plan.

djrobx

join:2000-05-31
Valencia, CA
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Call Waiting?

quote:
AT&T's case, the cost of call waiting has risen 86% since 2004, the cost of an unlisted number is up 346% and the cost of directory assistance has skyrocketed 1,630%.

Huh? I don't pay for call waiting with AT&T wireless - it's included.
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en102
Canadian, eh?

join:2001-01-26
Valencia, CA

Re: Call Waiting?

I was wondering about that as well.
I have had people calling in while I'm on a call, and I have options to 'ignore' or 'swap', if I'm not mistaken.

My bills have actuall stayed the same over the past years - mostly due to rollover minutes.

2 lines = $49.95 + $9.99 for 550 anytime + rollover + n+w
work discount = 28% discount on service.

ReVeLaTeD
Premium
join:2001-11-10
San Diego, CA
said by djrobx:

quote:
AT&T's case, the cost of call waiting has risen 86% since 2004, the cost of an unlisted number is up 346% and the cost of directory assistance has skyrocketed 1,630%.

Huh? I don't pay for call waiting with AT&T wireless - it's included.
In this context they're talking about regular AT&T, formerly known as SBC/PacBell/whatever. Call Waiting is still a separate, inflated fee. Caller ID, I remember when it was a little over $6 when I worked there, if I recall it's well over $10 now.
Mr Matt

join:2008-01-29
Eustis, FL
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·Millenicom

Wall Sreet likes deregulation.

Remember the word oligopoly. An business model where there so few companies in the business that there is really no competition. Industries that are monopolistic tend to be regulated. One must remember in the days of the Bell System Monopoly phone companies were regulated, prices were low and the Bell System made a profit.

The cellular oligopoly claims that cellular companies engage in price competition. With such a limited number of cellular companies there is no incentive for price competition. There is no incentive for cellular companies to reduce prices. Their actual business model is service with a cap (plan minutes) with overage fees set so high if one exceeds their plan minutes the price paid is actually punitive. Their business model is a gamble that a certain percentage of their customers will exceed their plan minutes and be shaken down.

I can get an additional 700 Minutes for $20.00 per month. If I exceed my plan minutes by 44.45 Minutes @ $0.45 per minute I will have to pay an additional $20.00 that month.

The cable companies are playing he same game by setting caps and then overage fees at punitive price levels. It is time to write you congressmen and senators to stop this obnoxious practice.

powerspec88
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Lenexa, KS
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I use

a total of ~800mins a month but a good 700mins of that is just mobile to mobile mins being used which is unlimited, and the rest is night and weekends. I have 700mins usage on my plan and out of that i use a good 10mins of it.

All my friends and family use AT&T so its free to call them, and i make most of my calls after 9pm anyways.
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CylonRed
Premium,MVM
join:2000-07-06
Bloom County

I could get a cheaper plan BUT....

I found that the one I have is best in my area for reception. I have not seen a bit of collusion in our area as we have several companies vying for the customer. I liked one a lot - no contract ands the price remained the same if you stayed on the same plan. Service was pretty good except for voice mails that would arrive 2-14 hours after they were sent and the one area we needed service - was dead.

We switched to Verizon with the 700 minute plan and since my wife called her sister a ton and she had Verizon we no longer 'paid' for the calls to her. Since then we added my FIL/MIL to our plan - we generally do not use more than 200 minutes/month. I wish I could go to a 400 minute plan for cheaper but....

I think people pay for reception more than anything else.
--
Brian

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bjf123
We Want... A Shrubbery
Premium
join:2000-02-11
Hamilton, OH

iPhone usage

I don't use my iPhone all that much. Last month, I had 77 minutes of calls, 49 text messages, and 157,386KB of data. The total bill was $66.52.
blacksurfer

join:2002-07-14
Sherman Oaks, CA

Re: iPhone usage

I use all my 1200 minutes...but I could switch to Prepay and talk less. I might do that soon.

Gaff
Every Villain Is Lemons

join:1999-09-05
North TX, US

With regards to directory assistance...

...everyone should be using 1-800-FREE411 anyway.

Completely free, paid for by advertising. I'm fine with that compared to ~$3 per directory assistance call.
Lenagainster

join:2005-01-07
Silver Spring, MD

Pure hoax

Without even reading the report, the results are obvious a hoax. $3 per minute? Do the math. That means on a $100 phone bill, the customer uses 33 minutes? That's the average? Baloney.
dentman42
Premium
join:2001-10-02
Columbus, OH

Re: Pure hoax

"who came to that number by comparing the average number of minutes charged in more than 700 San Diego consumers' telecom bills and dividing by the average number of actual minutes used."

Obviously flawed. Divide PRICE, not "minutes charged" by minutes used to get price per minute.

Fobulous
Premium
join:2002-08-14
Missouri City, TX

Depends on how you calculate the minutes..

I looked into my wife's plan. If you count ALL THE minutes that she used which was 237 last month, monthly with everything included of $48.94 it comes out to be .20/minute. However, if you one only counts the Peak minutes it will be 43 cents/ minute. Either way, it's still cheaper than the $35 Plus tax for a land line plus one keeps forgettting the fact that one cannot take the land line phone WITH them when they go out..so Cell phones are not only more convenient but with the right plans still cheaper.
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