US Cell Phone Companies Are Screwing You

Note:  These prices are for an android smart phone.

In the UK, I currently pay £10/mo (approx. $15.50) for all the minutes, text, & data I need. I don’t have a contract, can just not top up when I don’t have the money, and they’re no overage charges (it just won’t let me make a call if I don’t have money on it).

In India, I paid about 800 rupees (approx. $15.80) a month for minutes, text, & data.
Of those 800 rupees, the data was 99 rupees for 1 month – that’s enough data to leave my data connected all the time, check my email regularly throughout the day, etc, for a whole month… and it cost me less than two dollars. This included a few international calls, which I don’t make on my UK phone (without the calls to the US, it was closer to 300 rupees, or  $5.95 a month).  Same deal – I don’t have a contract, no overage charges, etc.  I also had service everywhere.

In the United States, to get a basic phone and text contract with Verizon it would be $39.99.  But, because I have a smart phone, I would have to pay an additional $30.00 a month for data.  Plus taxes and fees, we’re talking over $70.00 a month.
Furthermore, because I already own an unlocked phone (allowing me to just pop a SIM card in whatever country I’m in), I cannot actually use Verizon.
My options are limited pretty much to TMobile (which charges an additional fee to not use their phone, or at least did when I researched it earlier, doesn’t offer data on their pay as you go, but you could get a 10¢/minute package for $100 and it was good for up to a year), Companies That Market To People Who Don’t Speak English, and Walmart Family Mobile.

What I ended up doing when I was in the US, was going with Walmart Family Mobile, who uses the TMobile service anyway.  It was $25 to get it started, plus about $54/month after taxes and fees.  And it was just text and phone, because I never got their data to work – though they do have data, and I suspect it was mostly my phone that was the issue.

So let’s do some math here…

India United Kingdom US – Verizon Basic Contract US – Family Mobile
Per Month $15.80 $15.50 $70.00 $54.00
For 1 Year $189.60 $186.00 $840.00 $673.00*

* Includes $25 set up fee.

Dear People in the U.S.:

You are getting royally screwed by cell phone companies.

They provide worse service, coverage, and product than India or the United Kingdom.  They force you to buy data plans you do not need even if you just want to use the wifi on your phone.  They up the data plans so you get a supersized data plan even though you don’t need a data plan that large so they can make more money off of you.  And, when you pay money for your phone, that phone can only be used on the company you have a contract with – you can’t bring it over to another company.  Not to mention that if your company is providing very poor service, you’re stuck with them for two years.  You do not have a leg to stand on, as a customer.  You can’t speak with your wallet by going somewhere else, so cell phone companies have no real incentive to a.) provide decent service b.) keep their prices down.
And they’re getting away with it because you’re letting them.  Because you continue to renew your contract because you think you’re saving money on a contract.  You’re not.

If I lived in the UK for four years, I would still pay less in those four years combined than what you pay for just one year.

Just thought I’d share that bit of cheerfulness.  Think on that before you sign a contract in the US. Not that our current structure allows you to have any other options.  They got you pretty good, didn’t they?

This entry was posted in Grad School, United States, Generally and tagged , , . Bookmark the permalink.

4 Responses to US Cell Phone Companies Are Screwing You

  1. Roo says:

    Yeah. After Wikileaks sprang up I figured a bunch of local “mini-wikileaks” organizations would arrive on the scene for more mundane (yet still wtf-worthy) issues. So far, Honest Appalachia
    is the only one I’ve heard of.

    • RDW0409 says:

      Also, what are the KB/GB limits and speeds on the UK & Indian plans in question? I’m willing to take your word that the service in the US is inferior, but I always like to quantify my inferiority when possible.

  2. RDW0409 says:

    Interesting post. Any thoughts on why it’s like this? What economic forces keep the bills so much lower in these other countries that might not be in play in the US?

    It’s never crossed my mind that I am/would be saving money on a contract, but I’ve never been under the impression that there’s another choice. As you say, there aren’t a lot of services that don’t require a contract just to get on their network.

    Are telecom networks publicly owned in UK and India, is that why those companies can’t jack up the prices so high? Or are overseas consumers more willing to say “screw it, I’ll do without” if the prices are higher than they’re willing to pay?

    • Amy says:

      No, telecom networks are not publicly owned. I think the reason why the cost is so low is because contracts are so much more rare – if it’s too expensive or the service is spotty, you can always leave for another service. So you have to be more competitive, cost and service wise.
      India was actually better, coverage wise – I had coverage in rural India, in the Himalayas, etc. I used Vodaphone and had 3G in the cities and 2G elsewhere. This was around the start of 4G availability in the US, so India’s a little behind in that.
      Everything in the UK is at least 3G and I’m starting to see signs for 4G. I’m using Orange and the coverage isn’t as good as Verizon US or Vodaphone India – but unlike my Verizon (or TMobile) experiences in the US, I’ve also never had a dropped call.

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