Cell phones are intertwined with our lives no matter where we are in the world. The New America Foundation's Open Technology Initiative (OTI) recently completed a survey on the costs and types of mobile cell phone packages available to consumers around the world. With recent policy debates over Bill Shock and Consumer Disclosure, this study provides useful insight into business models prevalent in several key countries. Plans in some countries provide different offerings and bundled services for students, professionals, family, corporate and special needs consumers. In other countries it appears that a significantly more competitive market than what exists in the United States has resulted in innovative offerings and lower pricing for consumers. In contrast, in countries where competition is less and regulation more lax, higher prices and a limited choice of plans prevail.
In OTI's study, we researched cell phone voice, text and data services for prepaid, regular postpaid, and unlimited postpaid plans provided by prominent cell phone carriers in 11 countries. We consider unbundled services using rates available to individual consumers. To provide a more direct comparison, our study indicates the price in US Dollar (USD) per minute, per text, and per megabyte at a unit level and minimum total cost of individual cell phone package.
Key Findings: Across postpaid and prepaid voice plans, Canada, U.S., U.K. and Japan mostly fall in the high to middle price tiers while India, Hong Kong and Sweden fall in the low price tier.
For postpaid voice plans, the U.S. and U.K. are in the high price tier of countries surveyed, trailingonly behind Canada and Japan. Since receiving phone calls is free of charge in the countries studied, except for the U.S. and Canada (where customers are charged for calls placed and received); the rate per minute is doubled for these two countries, as shown in the figure. The cheapest postpaid voice plan is available in Hong Kong at $8.50 for 600 minutes per month, which is $0.01 per minute, while the monthly rate is $38.70 for 250 minutes in Canada and $39.99 for 450 minutes in U.S.(or $39.99 for 225 minutes of call minutes placed), which is $0.30 and $0.18 per minute respectively; almost 30 times higher than Hong Kong ($0.01/minute).
In addition, our study found that while some countries only provide plans and charge consumers with a preset minimum number of minutes regardless of their usage (though they can chose from the different volumes of preset plans depending on their needs) other countries charge consumers only for actual usage with a very negligible monthly fee. India and Sweden charge only by usage and cost $0.01 per minute and $0.04 per minute respectively.
In the case of prepaid voice plans, while Canada, Japan and the United Kingdom are in the highest price tier among the countries surveyed, with costs of $0.37 to $0.38 per minute. The United States is in the middle price tier at $0.25 per minute. This is much higher than the rates in countries such as India, Hong Kong, and Sweden, where pricing is $0.01/minute, $0.02/minute, and $0.04/minute respectively. Customers in South Korea ($0.09), Finland ($0.10), Taiwan ($0.12) and Denmark ($0.17) also enjoy relatively cheap rates for prepaid voice service.
Key Findings: U.S. is in the highest price tier in the postpaid and prepaid text plans sharing space with U.K., Canada and Denmark while Sweden, India and Japan fall in the lowest price tier.
For postpaid text plans, the U.K. provides the most expensive plan at $7.70 for 75 texts per month ($0.10/per text) with the U.S. following a close second at $5.00 for 200 texts per month (or $5.00 for 100 texts sent). Since U.S. customers have to pay for sent and received texts, the rate per text is doubled to $0.05. In contrast, the cheapest text rate offered is in Sweden at $17.80 for 5500 texts ($0.003 per text). In Canada, the cost is $4.80 for 250 texts ($0.02 per text). Again, while in the above countries, consumers are provided plans with a preset limit of texts, other countries charge consumers only by usage. Japan charges only $0.003 per text sent while both India and South Korea charge $0.01 per text sent.
Only five of the eleven countries surveyed offered unlimited text plans, namely, Canada, Denmark, India, Sweden and the United States. India offers the cheapest unlimited text plan $2.00 per month, followed by Sweden at $11.00 per month, Denmark at $14.00 per month and Canada at $14.59 per month. The U.S. price points are noticeably higher at rates of up to $20 per month.
In the case of prepaid text plans, India offers the cheapest available rate at $0.01 per text, followed by South Korea at $0.02 per text, and Denmark at $0.03 per text, whereas the U.S. and the U.K. have much expensive rates of $0.20 and $0.15 per text respectively.
Key Findings:Japan, Hong Kong, U.S. and Canada feature in the high to medium price tiers while India, Sweden, and U.K. emerge as winners in the low price tier.
In postpaid data plans, the U.S. offers $15.00 for 200 megabytes (MB) per month ($0.08/MB), lower than Japan which is at $4.70 for 0.5MB ($9.40/MB). However, the U.S. rate is several times more expensive than India at $2.10 for 5120MB ($0.0004/MB), Sweden at $9.50 for 1024MB ($0.01/MB), U.K. at $7.70 for 5120MB ($0.002/MB), South Korea and Taiwan at $12.00 for 500MB ($0.02/MB), Denmark at $17.00 for 500MB ($0.03/MB) and Finland at $8.90 for 300MB ($0.03/MB).
In the case of unlimited data plans, the U.S. is in the middle tier of service rates. The U.S. offers a plan of $29.99 per month which is cheaper than Canada ($72.90/month), Japan ($52.60/month) and Hong Kong ($38.00/month). On the contrary, Sweden offers much cheaper unlimited data plans for $13.80 per month, followed by India ($19.00/month), and Taiwan ($26.60/month).
For prepaid data plans, the U.S. has the most expensive rate at $10.24 per MB, whereas India offers $0.0004/MB, $0.43/MB in South Korea and $0.50/MB in the U.K. Several other countries that also have cheaper rates are $1.64/MB in Taiwan and $1.70 in Denmark.
It is important to note that in most countries, consumers can only subscribe to data plans after they subscribe to voice and text plans. Thus, even though certain countries offer cheaper postpaid or unlimited data plans, they end up paying higher price for a complete cell phone package if voice and text rates are higher.
Minimum Cost of a Complete Cell Phone Package
To get a holistic picture of the cost of a cell phone service, it is necessary to look at the total cost of all three services: voice, text and data. We will arrive at the final cost to the consumer by looking at the sum of the minimum monthly cost of each of the best available postpaid voice, text and data plans.
Type 1: Preset Limits
In Canada and U.S., consumers have the highest minimum monthly charge for a complete postpaid cell phone service at $67.50 and $59.99 respectively. Other countries that follow a similar cost structure at lower rates are U.K. at $32.40, Denmark at $39.00, and Finland at $40.10. These costs are based on plans where consumers are charged for a preset amount of voice minutes, texts, and/or data amount irrespective of the minimum amount of service they use. Consumers do have the option of choosing higher preset limits if their usage volume is higher. After going above the preset threshold, consumers are charged by high per usage rates.
Type 2: Pay-Per-Use
Following a different business model, operators in countries like India and Japan charge as per unit of usage along with a small monthly fee of $12.90 in India, $18.60 in Japan. Another country that follows this cost structure at a higher monthly minimum rate in addition to usage charges is South Korea at $36.20.
Type 3: A combination of Preset Limit and Pay-Per-Use
In the case of Hong Kong, Taiwan and Sweden, which have total price figures of $13.50, $23.74 and $34.05 respectively, customers are charged as per their usage with a slight relation to the Type 1 case above. A minimum monthly amount is charged to consumers but this charge can be used towards paying for voice minutes, text, or data. After customers cross the minimum monthly threshold, they are charged per unit of usage rates.
It is clear that some countries offer service at consistently lower prices than others. The United States tends to fall in a band of countries that charge higher prices to individual wireless consumers for everything except pure voice service where prices are comparable. Cost structures and business models undoubtedly vary as a result of the level of competition and innovation in each country and it is essential that in the countries that have high prices such as the U.S., we carefully consider additional steps that could be taken with respect to encouraging competition or imposing regulation such that the US becomes an engine of innovation for better and more competitively priced service offerings.
All sites are translated into English and were visited in September, 2010.
All exchanges rates are converted to U.S. Dollars by Yahoo Currency Converter in September. http://finance.yahoo.com/currency-converter/#from=USD;to=EUR;amt=1
Canadian cell phone carrier Rogers’ popular voice service charges $38.7 (CAD 40) per month for 250 minutes, weekend and weekday after 9pm is free. In addition, consumers can choose either unlimited text/ picture & video messaging, unlimited MY5 Canada-wide talk/ extreme text/ picture & video messaging, unlimited local calling to/from Rogers Wireless, Rogers Home Phone or Fido® customers, double minutes (equals 300 minutes), or unlimited 6pm early evening calling. http://www.rogers.com/web/Rogers.portal?_nfpb=true&_pageLabel=WLRS_Plans; voice Pay-As-You-Go plan starts from $0.38 ($0.4 CAD) per minute. Receiving call from the same plan Pay-As-You-Go users is free. http://www.rogers.com/web/Rogers.portal?_nfpb=true&_pageLabel=WLRS_Plans.
Denmark cell phone carrier Telenor offers postpaid voice plans. For medium volume users, the rate is $17 (DKK 99) for four hours. http://www.telenor.dk/privat/mobil/mobil/abonnementer/tale/index.aspx. Denmarkcell phone carrier Telia offers pay-as-you-go voice service and the standard rate is $0.17 (0.99 DKK) per minute. http://shop.telia.dk/telia/Abonnementer/Flex/subscriptionplan.dt?category=subscriptionPlans&abo=telia_flex.
Finland cell phone carrier Sonera offers voice plan $25.5 (€19.99) for 350 minute.https://kauppa.sonera.fi/yksityisille/puhelin_ja_liittyma/liittyma.aspx?Mode=Subscription. Voice Pay-As-You-Go plan charges $0.1 (€0.08) per minute. http://www.sonera.fi/puhelin+ja+liittyma/hinnasto/97/.
Hong Kong carrier SmarTone offers 3G voice service $7 (HKD 56) per month for 600 minutes; in addition to monthly fee, customers has to pay $1.5 (HKD 12) monthly administration fee. Customers subscribe to voice plans can enjoy free text message services when receive and send within same carriers. Voice Pay-As-You-Go plancharges $0.02 (HKD 0.15) per minute for the first 300 minutes, the rate goes down to $0.003 (HKD 0.02). Subscribers have to pay monthly fee $6.43 (HKD 50), which is applicable to deduct all call and data related charges. http://www.smartone-vodafone.com/jsp/mobile/prices/PayGo/tchinese/call_charges.jsp
Indian carrier Bharti-Airtel offers cell phone services across India. The city is set in Mumbai. Bharti-Airtel offers Pay-As-You-Go voice service charging $0.0002 (0.01 Rupees) per second ($0.01/0.6 Rupees per minute) when calling inside network;receiving phone call and message is free.http://www.airtel.in/wps/wcm/connect/airtel.in/airtel.in/home/forme_newuser/mobile/prepaid/. For post-paid plan (Airtel Turbo 249 Plan selected), the rate per minute is $0.01 (0.6 Rupees). Monthly charge $5.4 (249 Rupees) applies.
Japanese carrier SoftBank offers prepaid service charging $0.1 (¥9) per 6 seconds ($1 per minute). http://mb.softbank.jp/en/prepaid_service/prepaid_plan.html Softbank does not offer voice plans, but charges by usage: $0.185 (¥15.75) per 30 seconds. Customer has to pay monthly fee $10.1 (¥850) in addition to the charge per minute.Tax included. http://mb.softbank.jp/mb/price_plan/3G/orange_plan/simple_index.html
Korean cell phone carrier SK Teleom offers voice service at $0.0015 (1.8 Korean won) per second ($0.09 per minute). Monthly fee $10.75 (12000 Korean won) applies. http://www.tworld.co.kr/outsitens.jsp
Swedish wireless service provider Telia does not offerany package but charges by usage at $0.04 (0.29 SEK) per minute; customers have to pay monthly subscription fee $6.75(49 SEK), which can be deducted by call and text services. Two years contract required. https://www.tewss.telia.se/privat/katalog/VisaProdukt.do?productRef=/privat/produkter_tjanster/mobilt/abonnemang/teliamobil/teliamobilpratapa.product&preselproducts=500019093&navigationPath=/privat/produkter_tjanster/mobilt/abonnemang/teliamobilpratapa. For pay-as-you-go plan, Telia charges $0.04 (0.29 SEK) per minute for outgoing calls. Receiving phone call is free.
Taiwanese cell phone carrierChungHua Telecom pay-as-you-go plan charges$0.002 (NDT 0.09) per second ($0.12 per minute) for calling the same carrier, $0.005 (NDT 0.16) per second for calling outside carriers. Receiving phone call is free. http://www.idealcard.com.tw/rate.asp For postpaid plans, users can choose to payminimum monthly fee starting from $5.94(NDT 183) to deduct all call and text charges. The rate is$0.002 (NDT 0.08) per second ($0.12 per minute) for calling the same carrier, $0.005 (NDT 0.15) per second for calling outside carriers http://www.emome.net/channel?chid=134.
AT&T offers voice plan $39.99 for 450 minutes. Weekend and weekday night are unlimited. http://www.wireless.att.com/cell-phone-service/cell-phone-plan-details/?q_sku=sku3830290&q_planCategory=cat1370011;Pay-As-You-Go plan charges $0.25 per minute for in and out calls, tax, surcharges and fees are excluded. http://www.wireless.att.com/cell-phone-service/cell-phone-plans/pyg-cell-phone-plans.jsp.
UK cell phone carrier Three onlyoffers bundled voice and text services.SIM Only Plan charges monthly fee$17(£10)for 100 minutesfor calling outside networks, 2000 minutes for Three network users and 3000 text messages sent, at page 7. http://www.three.co.uk/_standalone/Link_Document?content_aid=1214305748126 Pay-As-You-Go voice service charges $0.38 (£0.25) per minute when calling other users outside Three network; no charge for calling 3 subscribers. $7.7 (£5) is minimum requirement using the plan http://www.three.co.uk/Pay_As_You_Go/What_it_costs.
Canadian cell phone carrier Rogers’ pay-as-you-go text service charges $0.14 (0.15 CAD) per message sent or received. http://www.rogers.com/web/content/wireless-products/addons. Rogers’ text plan charges $4.8 (CAD 5) per month for 250 text messages. Receiving text is free when you buy the package. http://www.rogers.com/web/content/add-ons/messagingbundles. Canadian carrier Telus offers unlimited text messaging plan $14.59 (CAD15) per month included incoming and sent Text, Picture or Video Messages. http://www.telusmobility.com/en/BC/mobile_messaging/messagingpackages.shtml.
Denmark cell phone carrier Telia offers text plans starting from $5 (30 kr) for 200 text messages. Receiving text is free. Pay-As-You-Go text charge is $0.03 (DKK 0.2) per SMS. Unlimited text plans is $14 (80 kr) per month. Customers have to pay monthly fee $23.7. http://shop.telia.dk/telia/Abonnementer/Flex/subscriptionplan.dt?category=subscriptionPlans&abo=telia_flex.
Finland carrier Sonera pay-as-you-go plan charges $0.1 (€0.08) per text. http://www.sonera.fi/puhelin+ja+liittyma/hinnasto/97/; text plan is $5.7 (€4.5) for 150 texts sent. Receiving text is free. https://kauppa.sonera.fi/yksityisille/puhelin_ja_liittyma/liittyma.aspx?Mode=Subscription.
Hong Kong carrier SmarTone offers pay-as-you-go text service, $0.06(HKD0.5) per text sent outside carrier subscribers. For postpaid service, consumers pay $0.06 (HKD 0.5) per text sending to outside network. Receiving text from all networks and sending text to inside network is free. No monthly charge applies. No unlimited text plan is offered, but voice plans are offered with complimentary texts sent and received within the same network. http://www.smartone-vodafone.com/jsp/mobile/prices/messaging_price_plan/tchinese/charges.jsp
Indian carier Bharti-Airtel offers several pay-as-you-go text service. $0.02 (1 Rupee) per text sent; receiving message is free. http://www.airtel.in/wps/wcm/connect/airtel.in/airtel.in/home/forme_newuser/mobile/prepaid/ For postpaid plan, the rate is $0.01 (0.6 Rupees) per text sent. Receiving text is free. Monthly charge $5.4 (249 Rupees)applies.http://airtel.in/wps/wcm/connect/airtel.in/airtel.in/home/foryou/mobile/postpaid/tariffs/ Unlimited text services is $2 (99 Rupees) per month for text sent to same carrier within Mumbai area and up to 500 text messages per day sent to nationwide. http://www.airtel.in/BestValue-Offers/Mumbai.html;
Japanese carrier Softbank offers postpaid text plan charging $0.003 (¥0.21) per text sent, receiving text and sending inside network is free. Monthly charge $3.8 (¥315) applies. Softbank also offers pay-as-you-go unlimited text plan for $3.66 (¥300) per month. http://mb.softbank.jp/mb/service/3G/mail/
Korean cell phone carrier SK Teleom charges $0.02 (20 Korean won) per text sent for pay-as-you-go plan. For postpaid plan, the rate is $0.01 (10 Korean won) per text sent, receiving text is free. Monthly charge $13.4 (15000 won) applies http://www.tworld.co.kr/outsitens.jsp.
Swedish wireless service provider Telia charges $0.04 (0.29 SEK) per text sent for pay-as-you-plan. For pay-as-you-go plan, Telia charges $0.04 (0.29 SEK) per minute for outgoing calls. Receiving phone call is free.
https://www.tewss.telia.se/privat/produkter_tjanster/mobilt/kontantkort/?sl=privat_produkter_tjanster_mobilt_kontantkort Telia text plan is $17.8 (129 kr) for 5000 SSM messages and 500 MMS messages per month. https://www.tewss.telia.se/privat/katalog/VisaProdukt.do?productRef=/privat/produkter_tjanster/mobilt/tjanster/meddelandetjanster/sms_mms_tillalla.product@SE_TELIAUnlimited monthly text plan is $11 (80 kr). http://shop.telia.dk/telia/Abonnementer/Flex/subscriptionplan.dt?category=subscriptionPlans&abo=telia_flex.
ChungHua Telecom charges $0.04 (NDT 1.22) per text sent to the same network subscribers; $0.05 (NDT 1.6) for outside network subscribers. Receiving text is free. $5.8 (NDT183) is minimum monthly charge using the plan and the charge can be deducted when sending texts.ChungHua Telecom does not offer unlimited text plans. http://www.emome.net/channel?chid=134.
AT&T offers text plan $5 for 200 text, picture, video, and Instant Messaging (IM) messages per month. Pay-Per-Use costs $0.20 per Text/Instant Message; 30 cents per picture/video message.http://www.verizonwireless.com/b2c/splash/plansingleline.jsp
UK cell phone carrier Three offers text service, $0.15 (£0.1) per textsent. Customers receive 25 free texts when top-up £5 in the prepaid phone. http://www.three.co.uk/Pay_As_You_Go/What_it_costs; Three also offers text plans starting from $7.7 (£5) for 75 text messages sent. Page 9. http://www.three.co.uk/_standalone/Link_Document?content_aid=1214305748126. No unlimited text plans available.
Canadian cell phone carrier Rogers offers data package at $24 (25 CAD) per month for 500MB. Additional Data charges $0.05/MB. No Pay-As-You-Go data plan available. http://www.rogers.com/web/Rogers.portal?nfpb=true&_pageLabel=WLRS_Plans. Canadian carrier Sasktel offers unlimited data plan for $72.9 (CAD 75) per month. http://www.sasktel.com/EndecaUI/controller//N-buZ1z140m8/Tab-4294966321
Denmark carrier Telia offers pay-as-you-go data charges $1.7 (DKK 10) /1MB.http://shop.telia.dk/telia/Abonnementer/Flex/subscriptionplan.dt?category=subscriptionPlans&abo=telia_flex
Telenor offers data plans, $17 (99 kr) per month for 500MB. http://www.telenor.dk/privat/mobil/mobil/abonnementer/services/surf_med_mobilen/surfer-m/index.aspx
Finland carrier Sonera offers data plan $8.9 (€6.96) for 300MB. https://kauppa.sonera.fi/yksityisille/puhelin_ja_liittyma/netti.aspx?Mode=Subscription&Talk=L201&Sms=L209
Hong Kong carrier SmarTone does not offer pay-as-you-go data plan. Monthly charge of data plan is $5 (HKD38) for 50MB. After 50MB, the charge is $15/15MB until $298 as the maximum charge per month. http://www.smartone-vodafone.com/jsp/mobile/prices/GPRS_price_plan/tchinese/3g_packet.jsp SmarTone also offers 3G unlimited data plan for $38 (HKD 298) per month. For blackberry and Vodafone users, the unlimited data plan charges up to $115.6 (HKD 898). http://www.smartone-vodafone.com/jsp/mobile/prices/GPRS_price_plan/tchinese/3g_packet.jsp
Indian carrier Bharti-Airtel offers Mobile Internet browsing of upto 2GB at a monthly fee $2.1 (98 Rupees) after which charge is $0.0064/50KB. http://www.airtel.in/BestValue-Offers/Mobile_Internet.html Bharti-Airtel offer blackberry unlimited data plan at $19 (899 Rupees) per month. http://airtel.in/wps/wcm/connect/airtel.in/airtel.in/home/foryou/mobile/blackberry/blackberry+internet+services/Tariffs/ For pay-as-you-go data plan, Bharti-Airtel charges $2.1 (98 Rupees) for 2GB. http://www.airtel.in/wps/wcm/connect/airtel.in/airtel.in/home/foryou/mobile/prepaid/services/
SoftBankoffers monthly data planat $4.7(¥390) for 0.5MB for postpaid data plan. http://mb.softbank.jp/mb/price_plan/3G/packet_s/ Unlimited data planis offered at $52.6(¥4,410) per month. http://mb.softbank.jp/mb/price_plan/X/packet_full/.
South Korean carriers SK Telecom offers pay-as-you-go data service $0.0002 (0.25 Korean won) for 0.5KBhttp://www.tworld.co.kr/common/popup/data_info/popup_datacharge_info.htmlSK Telecom offers 135 Data Free plan charging $12 (13500 won) for 500MB. http://www.tworld.co.kr/outsitens.jsp
Swedish carrier Telenor does not offer Pay-As-You-Go data plan; monthly data plan $9.5 (69 kr) for 1GBis offered. https://www.tewss.telia.se/privat/produkter_tjanster/mobilt/surfaimobilen/?sl=privat_produkter_tjanster_mobilt_surfaimobilen. Swedish carrier Telenor offers unlimited data plan $13.8 (99 krr) per month. http://www.telenor.se/privat/abonnemang/surfa-obegransat/index.html#T17286_3
ChungHua Telecom data plan charges $0.0002 (NDT 0.005) per 128bytes ($0.0002*8129 (128bytes) =$1.64 per Megabyte). http://www.emome.net/channel?chid=134; data plan is offered at $12 (NTD 400) per month for 500MBunlimited data plan is $26.6(NTD 850) per month http://www.emome.net/channel?chid=139
AT&T offers pay-as-you-go data service charging $0.01 per kilobyte.
http://www.wireless.att.com/cell-phone-service/cell-phone-plans/pyg-cell-phone-plans.jsp; AT&T charges $15 per month for 200MB for iphone, blackberry and smartphone users. Verizon wireless offers unlimited data plan at $29.99 per month. Tax excluded. http://www.verizonwireless.com/b2c/splash/plansingleline.jsp.Website visited on August 31, 2010.
UK carrier Three offers Blackberry data plan for $7.7(£5)for 2GB per month. Page 9. http://www.three.co.uk/_standalone/Link_Document?content_aid=1214305748126; Data rate is $0.5 (£0.3) per megabyte for pay-as-you-go plans;150MB isfree when top-up £5 in the prepaid phone http://www.three.co.uk/Pay_As_You_Go/What_it_costs.