Why are U.S. Mobile Plans so Expensive?

For most Americans, having a smartphone is almost an essential part of life. People rely on smartphones for business emails and calls, in addition to everyday activities like text messaging friends and family, making phone calls, surfing the Internet, and using apps.

Unfortunately, there’s always a catch. Mobile plans in the United States are some of the most expensive in the world. This is for a number of reasons:

Charging Mobile Plans Separately

Many providers in the United States charge for their services separately rather than provide a bundle of services. AT&T, for example, often charges $20 for text messaging services on any mobile plans that are not considered unlimited plans.

When examined closely, text message services are the equivalent of a small portion of mobile data, yet prices for this type of service is consistently faced with high markup costs.

By not bundling data and SMS services with making phone calls on a smartphone, mobile carriers are positioning them as additions to basic service. In today’s society, data and texting are often used more frequently than actually making a phone call. Bundling services together makes for more cost-effective smartphone plans in addition to reducing the hassle for ensuring that necessary services are always available on a mobile phone plan.

Expensive Data Plans

In the United States, an average mobile phone plan that includes a data allowance of 500MB when not tethered to a Wireless network can cost around 85 dollars. Comparatively, the same plan would cost about $24.10 in China and only $8.80 in the United Kingdom according to research conducted by the International Telecommunication Union using the U.S. dollar Purchasing-power Parity. The cheapest plan found in this research was in Austria, where an $85 mobile plan in the United States would cost just under $5.

One such plan in the United States is offered by Verizon, who promoted their 500MB data mobile plan at only $40. Unfortunately, this is not a bundle package, and a client must still pay an addition $40 every month to have the smartphone, bringing the total price of this seemingly cheap package to $80 without including taxes or other small fees.

This is a barebones mobile phone plan—so what would the middle ground packages be priced at? Definitely above what most Americans would want to pay.

Customers in the United Kingdom receive much more for a similar price point of $80 in their mobile phone plans. Carriers in the United Kingdom have what they call “Everything Everywhere” plans, where at $80 each month a client would receive 5GB of data, unlimited minutes for calling, as well as unlimited text messages.

Remember the question about the higher end plans in the United States? For 20GB data plans, customers are paying prices around $180 per month with Verizon, whereas the same plan would cost a mere $95 in the United Kingdom.

Cost of Mobile Phones

Where American service providers make claims of lower costs, is in the device itself. A $200 average smartphone price with a 2 year contract in the U.S. is, well, average compared to other countries, depending on the device (iPhone users beware). However, the cost over the two year span can reach upwards of $2500, the highest in the world.

Seemingly affordable devices have much higher mark-ups priced into your contract, making you pay far more over time than service providers in other countries.

Limited Competition

The major providers in the United States have a fairly solid grip on the mobile service market. Unfortunately, this has led to limited competition, higher prices, and lower consumer satisfaction. Mergers and rising infrastructure costs have led to a much smaller field of highly profitable service providers.

With less direct competition, prices for cell phone plans are unlikely to get any cheaper. Consumers continue to struggle with limited options, both in plan customization and switching companies.

The Solution

So what can you as a consumer do in the United States to help lower your currently astronomical mobile phone plan bill?

Bill negotiators can lower your bills and avoid the hassle of dealing with service providers. When consumers call to speak with a representative, they usually have a limited understanding of the process. The majority of customer service reps have little to no power to lower your bills. The paltry add-ons they might offer will likely amount to less than $5 a month in value.

At Billshark, we specialize in negotiating with service providers. With over 25 years of industry negotiation experience, we know exactly who to speak with and how to access better priced plans.

Are you paying $180 every single month to have your mobile phone? With our negotiation services, you could find yourself paying only $135 within the first negotiation session. That is a total of 25% of savings, in less than 5 minutes of your time.

Even for those paying mobile phone bills in the national average range – anything around $80 monthly – we can help. Our team of sharks will fight on your behalf to get the best possible price. It’s easy; all you need to do is send us a picture of your bill.

There’s no need to worry about paying more—we will split the first year’s savings with you.

Contact us, or learn more about who we are and how we can help you make your life more affordable.