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How Can Cell Phone Service Be So Expensive?

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How Can Cell Phone Service Be So Expensive?

Old 06-05-06, 07:39 PM
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Originally Posted by shifrbv
Conveneince and most people will pay for it

ie, most people are idiotic consumers??
Way to insult most of the people reading your thread, Chief.

I pay $55 a month for a phone with 1000 anytime minutes per month with roll-over (meaning my unused minutes roll over to the next month). I have free nationwide calling (no roaming) and free long distance. I've had the plan for awhile and currently I have 7000 minutes available. That means I could talk 24 hours a day for almost 5 days straight to anyone in the country <i>from</i> anywhere in the country and not get charged extra. Also, that includes insurance on my phone--if I ever break it, for any reason, they'll replace it. Actually, I've been out of contract for awhile now, so I could choose a completely new phone at this point.

So, uh, if saving $25-30 a month is that important to you over the convenience, go for it.
Old 06-05-06, 08:21 PM
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Originally Posted by shifrbv
prices are higher now than ever.






...

*sniff*

*sniff*

Wait, wait...





OK, man, that was a good one. You really had me going. We're all wishing for the cellphone prices of 1985 when calls were a penny a minute.


Old 06-05-06, 08:50 PM
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Originally Posted by milo bloom
What about these stories I hear all the time about places like Asia and Europe where they pay the equivelant of $10 a month, plus they own their phone and can take it to a different provider if they want (ie, they're not electronically locked).
Keep in mind that the vast majority of cellular phone users outside the US don't have "plans" like we do; almost all of it is prepaid. In less developed areas it is the only way to do it due to the fact that the credit systems there are mostly nonexistent, but even in developed countries (primarily Europe and Japan) the pre-paid model is standard. That's not to say there aren't any plans available, it's just that most people choose (and most importantly they have the readily available option) to go pre-paid.
Old 06-06-06, 12:59 AM
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If you think cell phone service is too expensive, just check what people pay in other parts of the world. They pay more $$$ per minute pretty much anywhere in the world. Also, if you factor that the purchasing power of the average American is much much higher than the average citizen of most countries it makes the cost per minute of the average American cell phone user minimal. Also, take this into consideration, most telephone companies have been profitable for most of their lives. On the other hand, cell phone companies in the US have been loosing a LOT of money as an industry. I mean A LOT OF $$$. The infrastructure for landlines is more expensive BUT you have to remember that the phone company had a monopoly, back in the days there was not several local companies you could choose from. Also, with the mergers and adquisitions that the cell phone market has experimented we have started the inevitable and sooner or later when the number of players is small enough, the prices will go up.
Old 06-06-06, 07:56 AM
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Originally Posted by elperdido
If you think cell phone service is too expensive, just check what people pay in other parts of the world. They pay more $$$ per minute pretty much anywhere in the world. Also, if you factor that the purchasing power of the average American is much much higher than the average citizen of most countries it makes the cost per minute of the average American cell phone user minimal. Also, take this into consideration, most telephone companies have been profitable for most of their lives. On the other hand, cell phone companies in the US have been loosing a LOT of money as an industry. I mean A LOT OF $$$. The infrastructure for landlines is more expensive BUT you have to remember that the phone company had a monopoly, back in the days there was not several local companies you could choose from. Also, with the mergers and adquisitions that the cell phone market has experimented we have started the inevitable and sooner or later when the number of players is small enough, the prices will go up.

This is what has me worried.The big companies are quietly buying up the smaller ones.Pretty soon we're only going to have like four options for a carrier.Meaning fixed rates.
Old 06-06-06, 08:33 AM
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I pay about $50 a month for my cellphone service when the taxes are added in, and about $70 a month for my land line which has unlimited nationwide calling. Since I have friends I call in the UK and New Zealand, both my cell and land lines have an international plan.

I waited to get a cell phone until about 18 months ago, and before I had one, I grumped about how rude people were with theirs, etc. and how stupid it was to spend money on them. Well, I'm a changed woman now. As a woman who does a lot of traveling alone for business and personal reasons, I consider my cell phone not only a marvelous convenience but an important tool for personal safety. I would not be without it.

And to say they are expensive is a little ridiculous since, as others have pointed out, prices have come way down. If you think they're too expensive, fine, don't get one. But don't insult people who have different priorities by saying they're wasting money. For me, $50 a month is a small price to pay for knowing I can call for help from just about anywhere I may be.
Old 06-06-06, 06:06 PM
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Originally Posted by shifrbv
Conveneince and most people will pay for it

ie, most people are idiotic consumers??
Because the convenience is worth more $$ to others than it is to you, they're idiotic?

I have a prepaid cell phone through Verizon, $50/month for several hours of anytime minutes, free nights and weekends, and free to other cellphones any time. I looked into switching to cell-phone-only when I realized that 1)I don't spend hours and hours on the phone, generally, 2)when I DO, it's on the weekend or at night, and 3)I could save money having the free long-distance that came with the cell phone, whereas I was paying more for long-distance on a land-line. Plus, now that most of my friends and family have cell phones, we're free to call each other (depending on their plan), and that's even more savings right there. Because it's prepaid, I don't ever get surprised with extra charges (the biggest benefit with going prepaid), and I never use up all the minutes anyways.

The best part is, when I'm stuck somewhere (waiting at a doctor's office, waiting in line outside, etc) or I have freetime but don't want to use the office phone (ie, at lunch), I can use the phone and make and receive phone calls. I agree, it's worth it not to ever EVER need to use a payphone again.
Old 06-06-06, 06:11 PM
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Originally Posted by Vibiana
If you think they're too expensive, fine, don't get one. But don't insult people who have different priorities by saying they're wasting money. For me, $50 a month is a small price to pay for knowing I can call for help from just about anywhere I may be.
This is a good point: yes, you can call 911 from any cell phone (even one with no phone plan), but when my car broke down not long after moving to L.A., I didn't want to call 911, I called my boyfriend, then AAA, then some autoshops, all while waiting for the towtruck to arrive. No way would I have felt comfortable hiking around downtown L.A., after dark, looking for a payphone, when I could just lock myself in the car and call from there.
Old 06-06-06, 06:44 PM
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I'm sorry. I'm still laughing at the OP's comment that cellphone prices have increased.



Geez.

* wipes tear *

Old 06-06-06, 09:01 PM
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I have 500 minutes, unlimited N&W's, unlimited sprint to sprint, no roaming fees, and unlimited evdo internet for $30. That seems pretty cheap to me.
Old 06-06-06, 09:14 PM
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Originally Posted by The Bus


I'm sorry. I'm still laughing at the OP's comment that cellphone prices have increased.



Geez.

* wipes tear *


Okay, maybe they haven't *increased* per se, but it seems to me the price structure is still higher than it could be. An example that comes to mind right now is music CDs: they're still way higher than they should be, and it's mainly because people keep paying that much money for them. The record companies complain about piracy, but there's still enough stupid people buying CDs for $19.00 at the Sam Goody in the mall to keep record sales in the billions of dollars each year.

I just feel that there's not enough competition between all the big companies driving the prices down.
Old 06-06-06, 11:25 PM
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Originally Posted by shifrbv
It's not like this stuff was just installed yesterday. Most of the technology has been around for a good 10 years but prices are higher now than ever. I think it more attributable to gouging. Do cell phones have any regulatory commissions like other utilities do? I think that may be where the problem lies.
Have you looked at old cell plans? My first cell phone cost $500 and I got 30 mins a month for $30. The technology has significantly improved and the price has come down. Cell companies are regulated by the FCC like landline phone companies. Plus, cell companies just cant put up a tower and start sell ing phones. They have to but the right to use frequency spectrum from the FCC which can cost billions. Plus, each market can only have so many providers. I live in a very rural area, and Alltel is the only company allowed to sell service. Your bigger cities will have many more providers, but many times, companies will just lease other companies bandwith, as they dont have their own in that market.
Old 06-07-06, 09:00 AM
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Originally Posted by milo bloom
An example that comes to mind right now is music CDs: they're still way higher than they should be, and it's mainly because people keep paying that much money for them.
This statement makes my head hurt.
Old 06-07-06, 11:25 AM
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Originally Posted by milo bloom
An example that comes to mind right now is music CDs: they're still way higher than they should be, and it's mainly because people keep paying that much money for them.
Awesome.
Old 06-07-06, 12:11 PM
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The folks complaining about how high the plans are, need to remember: in the U.S. (and only in the U.S.) the handsets are CHEAP/discounted/FREE, in return, your phone bill costs more, because you're amortizing the cost of the handset over a 1 or 2 year contract. I detest this system, especially since my wife and I upgrade our handsets on a whim (about once a year), and buy them from FleaBay/etc, so we're not costing the carrier anything in those cases.

If you lived in the EU or somewhere, you'd buy your handset outright (and pay 250-500 for it), and have cheaper monthly plans or prepaid minutes.
Old 06-07-06, 02:27 PM
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Originally Posted by The Bus


I'm sorry. I'm still laughing at the OP's comment that cellphone prices have increased.



Geez.

* wipes tear *

You can laugh all you want, but some of the other comments in this thread seem to clearly be on my side. Companies are consolidating and costs will/are in the process to increase-people have stated that they have cheap plans which they are hanging onto because they're not offered today and they couldn't get them again-the service is not being streamlined like other technologies (ie. the internet) resulting in plan pricing that hasn't changed for some in over 8 years.

Just wait, cell phones are going to be like cable. Only a few providers and nobody's bills are going down, only increasing. They need only get people hooked and they will pay any price. In that perspective, it doesn't seem that funny.
Old 06-07-06, 02:35 PM
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they have cheap plans that they dont want to turn in for a slightly more expensive plan
because they have plans that arent stuffed with so many features and extras (or minutes).. extras that alot of us want.. but if you have a plan without the options at a lower price, you might be content to keep it to save money.
Old 06-07-06, 02:44 PM
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My advice is to call the service providers and ask about the unadvertised promotions. I'm with Cingular and the plan they're switching me to is one of those. These promotions usually occur around the major holidays/events, the last one being Mother's Day. With Father's Day and July 4th around the corner, there's probably a few promotions going on.

You can probably shave off a few bucks if you have a bundle deal. For example, my local phone service and FIOS service is with Verizon. I got a small discount for FIOS because of the bundle deal. If I switch my wireless to Verizon, I can get a few more bucks off.

Last edited by GMan2819; 06-07-06 at 02:47 PM.
Old 06-07-06, 02:51 PM
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Originally Posted by GMan2819
My advice is to call the service providers and ask about the unadvertised promotions. I'm with Cingular and the plan they're switching me to is one of those. These promotions usually occur around the major holidays/events, the last one being Mother's Day. With Father's Day and July 4th around the corner, there's probably a few promotions going on.

You can probably shave off a few bucks if you have a bundle deal. For example, my local phone service and FIOS service is with Verizon. I got a small discount for FIOS because of the bundle deal. If I switch my wireless to Verizon, I can get a few more bucks off.
I'm with Cingular too, mostly because they'll bundle my service with my SBC (now AT&T) land line and send me just one bill. It's more convenient. However, I've thought about switching to Verizon when my contract expires this December. We'll see.
Old 06-07-06, 04:58 PM
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Originally Posted by milo bloom
An example that comes to mind right now is music CDs: they're still way higher than they should be, and it's mainly because people keep paying that much money for them. The record companies complain about piracy, but there's still enough stupid people buying CDs for $19.00 at the Sam Goody in the mall to keep record sales in the billions of dollars each year.

Okay, I see there were some comments on that, and I'm sure somebody wanted to give me the "supply and demand" lecture, but the point I was trying to make was that even though there are a lot of people buying CDs at $19 a pop, enough to make the record companies a lot of money, I feel that just slightly lowering the price would increase their volume of units sold and they'd make the difference up that way, and maybe even increase it (the problem is they'd rather whine about piracy).

I guess it was a bad example, but I was trying to make the point that the cellphone companies continue to charge a lot because we keep paying it. And since the competition is limited in certain areas (due to licensing and whatnot as pointed out above), the prices are likely not going to come down anytime soon.

I'm saying I see all these reasons, but I still think there's room in their business model for a barebones service with a lower monthly fee. I don't need all the bells and whistles and Kanye West ringtones, I just want a phone!
Old 06-07-06, 07:50 PM
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milo, your cd point is interesting. Cd's cost very little to make yet they still charge a lot for them . I read an article saying that when they 1st came out the promise from the industry was that they would be cheaper as more people bought them. But what they did was increase the price of cassettes while keeping cd prices high.

Last edited by Giantrobo; 06-08-06 at 04:00 AM.
Old 06-07-06, 08:26 PM
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Originally Posted by shifrbv
You can laugh all you want, but some of the other comments in this thread seem to clearly be on my side. Companies are consolidating and costs will/are in the process to increase-people have stated that they have cheap plans which they are hanging onto because they're not offered today and they couldn't get them again-the service is not being streamlined like other technologies (ie. the internet) resulting in plan pricing that hasn't changed for some in over 8 years.

Just wait, cell phones are going to be like cable. Only a few providers and nobody's bills are going down, only increasing. They need only get people hooked and they will pay any price. In that perspective, it doesn't seem that funny.
Working for a cell phone provider here in Canada, it is quite obvious no one should be on your side...and laughing is justified. Prices are NOT going up...they are decreasing significantly...and the reason you have to pay roaming charges is because YOUR cell phone provider is not placing that call for you, it is another cell company who is charging you for using their towers. There are so many deals available right now, that if you looked into them you would see that not being ridiculous with long distance and using your phone for local calls will cost you around $20/mth. Cell phones are not designed for hours of long distance calling, they are designed as a means to stay in contact while out and about, or in case of emergency. Also, cell phone reception is constantly improving as companies add more towers (which provide the service) each and everytime they can. Complaining cause your cell service costs more than landline service is like complaining about paying for a camera that does not need to be plugged into the wall, and is portable vs. a camera that must be plugged in at all times, and can not be carried in your pocket.
Old 06-07-06, 10:18 PM
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I have Cingular get a discount with work and I pay 75 dollars a month for 1300 shared minutes nights that start at 7 and unlimited Cingular to Cingular. We do not have a home phone. Also the home phone plans I have seen with all the unlimited long distance seem to be around 60 bucks a month after all the fees.
Old 06-07-06, 10:21 PM
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I wonder if the OP had to pay a large deposit to get a cell phone is not happy with that.
Old 06-08-06, 03:57 AM
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The cheapest plan I could find was with Sprint for $29.99 per month and possibly a $5 discount if I do online billing since I already have Sprint. That brings me to $25 per month, but I don't know what taxes and other fees there will be. In the end, it will still probably end up being ~$30 per month (the same as my landline).

That gives me 500 minutes per month which is almost 17 minutes per day that I can talk without going over my minutes. (The next plan up gives 900 minutes, but that's $60 and only let's me talk 30 minutes a day which is hardly anything).

Let's see, 17 minutes per day vs. unlimited minutes and people are saying these cell phone deals are so amazing and it's feasible to replace a landline? I guess if you don't plan on actually using the phone much.

Not to mention, with my landline, I don't pay for long distance with my bill. I use the 10-10 numbers at 5 cents per minute when I need to call long distance. Even talking with friends and relatives for up to 3 hours at a time, I still average less than $10 in long distance per month as the cost goes down the longer you talk.

I still see alot of bias in this thread. People working for cell companies, people very proud of the fact that they can get this service for over $100 a month yet still have limited calling ability. Of course, people going for this have to find some way to rationalize the pricing. Nobody wants to think of themselves as a sucker. But I've still yet to see any compelling arguments and anyone coming close to a reasonable number of minutes or service level that could justify paying those prices.

Last edited by shifrbv; 06-08-06 at 04:06 AM.

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