If your monthly cellphone bill seems high, that may be because U.S. cellphone service is among the most costly in the world. A comparison of two similar plans, one in the United States and one in Britain, reveals a marked difference.
Both plans include a new iPhone 5S with 16 gigabytes of memory. Both require a two-year commitment and allow unlimited voice minutes and unlimited texting.
The plan offered by the British provider, Three UK, offers unlimited data and requires no upfront payment. With Britain’s 20 percent tax included, the plan costs 41 pounds a month, or $67.97 at current exchange rates.
The plan provided by the American carrier, Verizon Wireless, has an upfront cost of $99.99 and then $90 a month, not including taxes. Spreading the upfront cost over 24 months and adding 17 percent tax – typical for the United States – comes to $109.47 a month. But while the British plan includes unlimited data, the American plan does not. It includes two gigabytes a month, with an additional gigabyte free during an introductory period.
To put that in perspective, two gigabytes of data allows streaming about 15 minutes of music a day and watching about 10 minutes of video a day, according to the Verizon Wireless Data Calculator. If you run over, you’ll see it on your bill.
So why the $41.50-a-month difference in price? Several factors are involved, but an important one is regulatory policy. Britain has forced companies to lease their networks to competitors at cost. The United States has not, allowing a formidable barrier against competitors.
“The United States lacks meaningful competition in its cellular market sector, which leads to higher cell-plan prices than a growing list of other countries,” said Sascha Meinrath, founder of the Open Technology Institute at the New America Foundation.
In a 2010 study, the institute found that the minimum cost of a complete cellphone package, which features voice, data and text, was $59.99 a month in the United States, compared with $32.40 in Britain.
“Over the next decade,” Meinrath said, “U.S. consumers may overpay by over a quarter of a trillion dollars for worse levels of service than customers in other countries receive.”