Why are phone plans so expensive?

[JMapleton]

because CEOs summer homes need pools? and 10th Ferrari's need new tires?

Corporate greed.. that's why..

A cell phone company's primary goal was not to provide a service, but to make money.

This may seem like a negative thing, but there is not such thing as a benevolent cell phone company.

There are two options in society:

1. A poorly run government/public organization providing a service in an inefficient manner (which leads to higher prices). Like the USPS.

2. Or a well run organization out to make a profit (which sometimes can lead to higher prices, but most often leads to competition and lower prices). Like NewEgg.

You have to choose one. There is no inbetween. Ghandi and Martin Luther King weren't interested in starting cell phone companies.

Many of you may remember that Anandtech exists to make a profit, that's why Anand lives in luxury. But his content is awesome and provides an excellent service. That's capitalism. It's not perfect, but it's the lesser of the two evils.

 

[Sureshot324]

A cell phone company's primary goal was not to provide a service, but to make money.

This may seem like a negative thing, but there is not such thing as a benevolent cell phone company.

There are two options in society:

1. A poorly run government/public organization providing a service in an inefficient manner (which leads to higher prices). Like the USPS.

2. Or a well run organization out to make a profit (which sometimes can lead to higher prices, but most often leads to competition and lower prices). Like NewEgg.

You have to choose one. There is no inbetween. Ghandi and Martin Luther King weren't interested in starting cell phone companies.

Many of you may remember that Anandtech exists to make a profit, that's why Anand lives in luxury. But his content is awesome and provides an excellent service. That's capitalism. It's not perfect, but it's the lesser of the two evils.

Capitalism is better for a lot of things, but not everything. Imagine if all roads were privatized. There would be 2-3 duplicates of every road and you'd have to choose if you you want to sign up for company A's roads, or company B's roads, etc.. The government may not be as efficient at maintaining a set of roads, but the fact that they only have to maintain ONE network of roads makes it overall much more efficient.

Once these three companies have 3 duplicates of every road, it becomes very difficult for a 4th company to enter the picture. Now the 3 companies have no fear of new competition, and are unlikely to kill off one of the other 3, so you're not exactly going to have cutthroat price competition.

The wireless industry is the same way. If there were only one government owned wireless network it would be a lot more efficient and cheaper. Same with wired ISPs.

In this case, socialism > capitalsim.

 

[dawp]

A cell phone company's primary goal was not to provide a service, but to make money.

This may seem like a negative thing, but there is not such thing as a benevolent cell phone company.

There are two options in society:

1. A poorly run government/public organization providing a service in an inefficient manner (which leads to higher prices). Like the USPS.

2. Or a well run organization out to make a profit (which sometimes can lead to higher prices, but most often leads to competition and lower prices). Like NewEgg.

You have to choose one. There is no inbetween. Ghandi and Martin Luther King weren't interested in starting cell phone companies.

Many of you may remember that Anandtech exists to make a profit, that's why Anand lives in luxury. But his content is awesome and provides an excellent service. That's capitalism. It's not perfect, but it's the lesser of the two evils.

One of the problems with at&t is that they put stock performance above all else, to the detriment of the customers, employees and service. Why do you think they are one of the most hated corporations in the country? Take care of your customers and profit will follow.

 

[shortylickens]

One of the problems with at&t is that they put stock performance above all else, to the detriment of the customers, employees and service. Why do you think they are one of the most hated corporations in the country? Take care of your customers and profit will follow.

Yeah the law actually requires corporations to try to make money (so investors dont get screwed or rich guys use them as a tax shelter). The downside is some companies do horrible things to get those profits.

 

[Dulanic]

Yeah the law actually requires corporations to try to make money (so investors dont get screwed or rich guys use them as a tax shelter). The downside is some companies do horrible things to get those profits.

Only because consumers support it. doing what they do they are still huge.

 

[alkemyst]

much of why our services dealing with radio / video transmission are so expensive is because back in the day the government decided to just hand out all the bandwidth to what at the time were the big radio/tv companies.

Now much of the time to fit traffic in another company has to pay a premium to buy a slot of "radio" space that's not even being used nor intended to be. In other countries, you really can't own something like that unless you are using it.

Same way with a lot of land here. The railroad companies raped that deal to buy land in the middle of nowhere for pennies on the dollar. Instead of bring the railroad directly to the site they were promising...they created other cities along the way.

I am sure in the beginning some overseer said "you can't do that!", but then was handed a nice big bag of money with the response, "oh, but are you sure we cant?"

 

[Vic Vega]

Wife and I pay $65 month for two lines.

Wife: Unlimited messaging, unlimited data, 1,200 minutes.
Me: Unlimited data, unlimited messaging, 300 minutes (I don't talk much).

We both have brand new touch phones with the latest version of Android.

Flat rate is the only way to go. 1995 called, they want their contracted cell service back.

I will NEVER sign a phone contract again.

 

[alkemyst]

ghetto cell phone plans are great in the area you buy them, they usually don't scale nationally...definitely not internationally and don't offer advanced services much of the time.

Now I do agree most have plans/phones beyond their paygrade in life.

However; I travel and need support for advanced services. Also with my new job I will be international at times.

 

[Tom]

I already have a wifi only phone. Coverage is very limited though as implied.

Ideally it would look something like this:

2 lines
300mins
unlimited 4g for both

$85

Does that not seem reasonable for wireless internet? I would make calls through the internet and avoid paying for all those minutes completely.

How much does a 4g wifi access point cost ? I think a 3g one is about $40-50 a month. That's close to your price and you shouldn't need any minutes anyway.

 

[Tom]

A cell phone company's primary goal was not to provide a service, but to make money.

This may seem like a negative thing, but there is not such thing as a benevolent cell phone company.

There are two options in society:

1. A poorly run government/public organization providing a service in an inefficient manner (which leads to higher prices). Like the USPS.

2. Or a well run organization out to make a profit (which sometimes can lead to higher prices, but most often leads to competition and lower prices). Like NewEgg.

You have to choose one. There is no inbetween. Ghandi and Martin Luther King weren't interested in starting cell phone companies.

Many of you may remember that Anandtech exists to make a profit, that's why Anand lives in luxury. But his content is awesome and provides an excellent service. That's capitalism. It's not perfect, but it's the lesser of the two evils.

You're wrong about one important point, "well run" has little to do with being a public or private entity.

For example, the Post Office is well run, it's financial issues come from their mandates to serve all addresses and that they cannot set their own rates to match their costs. But it's a very efficient and effective operation.

And private companies are often poorly run, and if there isn't sufficient competition and an open market, private companies often are less efficient and more costly than publicly provided services. Like in healthcare where private entities overprescribe costly procedures because it's profitable for tthem, not becasue there's much health benefit.

 

[HeXen]

actually its never been cheaper and so many more options available. Cell phones used to be a nightmare years ago, in costs, signal and choices.

 

[Fenixgoon]

<--- virgin mobile w/ samsung intercept (now with froyo!)

300 minutes, unlimited text/web/data. $25/mo.

 

[JMapleton]

For example, the Post Office is well run, it's financial issues come from their mandates to serve all addresses and that they cannot set their own rates to match their costs. But it's a very efficient and effective operation.

The Post Office is terribly run. You're incorrect. They do not serve all addresses. I work for an internet retail company and we ship FedEx because they ship to almost all addresses and the USPS doesn't ship to most super rural addresses, while FedEx does. The USPS makes people in very sparse areas use PO Boxes to get their daily mail.

Their financial issues come from their socialist pension system. Pensions are and will be the downfall of many old companies (like GM), countless government entities, police and fire departments, and many others. Pensions are a terrible invention that are bankrupting so many places now.

 

[JMapleton]

The wireless industry is the same way. If there were only one government owned wireless network it would be a lot more efficient and cheaper. Same with wired ISPs.

In this case, socialism > capitalsim.

No it wouldn't, what many people fail to understand is this one simply truth: The government cannot make a profit at anything and sucks are running everything.

If there was a nationalized cell phone company, we'd all be paying $100 bucks a month, poor people would get free cell phone services, all cell phone company employees would get $8,000 a month retirement pensions, and we'd have politicians arguing over how it should be run and nothing would ever get done because the government wouldn't be too cheap to hire a well paid executive to run it.

Look how expensive it was to make a long distance call when there was an ATT monopoly (pre 1983). Now it's free on most plans.

A nationalized cell phone service would be a train wreck.....speaking of train wreck, look at Amtrak. Another poorly run, money loosing operation. And the USPS. And most city golf course systems (including the one in my city, which is draining our city of money every year).

 

[Brainonska511]

The government cannot make a profit at anything and sucks are running everything.

Better shut down the military. Those lazy good for nothing government employees!

 

[alkemyst]

The Post Office is terribly run. You're incorrect. They do not serve all addresses. I work for an internet retail company and we ship FedEx because they ship to almost all addresses and the USPS doesn't ship to most super rural addresses, while FedEx does. The USPS makes people in very sparse areas use PO Boxes to get their daily mail.

Their financial issues come from their socialist pension system. Pensions are and will be the downfall of many old companies (like GM), countless government entities, police and fire departments, and many others. Pensions are a terrible invention that are bankrupting so many places now.

lol if fedex is delivering somewhere USPS doesn't that's gotta be expensive and unreliable. USPS is your best bet for secluded addresses.

 

[JMapleton]

lol if fedex is delivering somewhere USPS doesn't that's gotta be expensive and unreliable. USPS is your best bet for secluded addresses.

How can they be your best bet when they don't even deliver there! Most very very rural areas USPS doesn't deliver at all.

FedEx is extremely reliable. I help run a department that does $50m in internet sales, in an industry where a large chunk of the customers are from rural areas, I would know.

The USPS is NOT reliable. I have customers who use them to return items back to us and they often never get back to us.

 

[JMapleton]

Better shut down the military. Those lazy good for nothing government employees!

We have motivated and brave soldiers, that's why our military is successful. The large portion of the technology is developed by private companies and the jets and other military vehicles are built by private companies.

Same as cops and firefighters, great employees, but the politicians who run those organizations ruin them financially.

We could probably be paying our troops more if the politicians didn't waste so much.

 

[rh71]

- refuse to pay for instant messaging on phones
- refuse to pay for a monthly data plan

this shit wasn't available to us before when cellphones were cellphones, they are LUXURIES.

I pay $22/person for a 5-person share plan (500 minutes). We actually just use the phones as phones and have never gone over. I play with an ipad at home and I don't see the great necessity to pay for data plans as if I were out with it (or iphone) all the time. All that shit isn't worth the charge per month - I use it for maybe 5 minutes a day and the rest of the time I'm actually trying to find something to do with it (hmm what website should I go to next?). If anything, I'd just have an ipod for music while commuting.

 

[alkemyst]

How can they be your best bet when they don't even deliver there! Most very very rural areas USPS doesn't deliver at all.

FedEx is extremely reliable. I help run a department that does $50m in internet sales, in an industry where a large chunk of the customers are from rural areas, I would know.

The USPS is NOT reliable. I have customers who use them to return items back to us and they often never get back to us.

Being part of a shipping dept <> running it.

I will lead you in on a hint. While almost 100% of the time my bills arrive no problem, I have known co-workers constantly late on their bills because 'they never arrived'...never mind that one should know they owe someone money anyway each month.

Also in sales that I was owner / operator I learned many customers would send items back via USPS and I would get them no problem. I also know many would claim they did and I never did. I truly believe many just kept the item.

I switched to providing my own labels and didn't have problems since whether is was USPS or FedEx.

 

[Tom]

How can they be your best bet when they don't even deliver there! Most very very rural areas USPS doesn't deliver at all.

FedEx is extremely reliable. I help run a department that does $50m in internet sales, in an industry where a large chunk of the customers are from rural areas, I would know.

The USPS is NOT reliable. I have customers who use them to return items back to us and they often never get back to us.

You dont know what you're talking about. I've worked in shipping business for almost 40 years, the post office does serve every address in the USA, Fedex doesn't.

They also have comparable loss rates to both UPS and Fedex, and they charge a lot less, other than sweetheart deals with large shippers.

If Fedex handled 1st class mail, letters would cost about $2 per piece.

 

[Tom]

The Post Office is terribly run. You're incorrect. They do not serve all addresses. I work for an internet retail company and we ship FedEx because they ship to almost all addresses and the USPS doesn't ship to most super rural addresses, while FedEx does. The USPS makes people in very sparse areas use PO Boxes to get their daily mail.

Their financial issues come from their socialist pension system. Pensions are and will be the downfall of many old companies (like GM), countless government entities, police and fire departments, and many others. Pensions are a terrible invention that are bankrupting so many places now.

what do you suggest, firing squads when people turn 65 ? btw, UPS and Fedex have pension plans too, that has nothing to do with the post office's problem.

 

[JMapleton]

You dont know what you're talking about. I've worked in shipping business for almost 40 years, the post office does serve every address in the USA, Fedex doesn't.

That is absolutely wrong. Every single day I speak to a person who lives in an area where the Post Office doesn't delivery. They have to drive to pick up their daily mail at a PO BOX.

The customers tell me, "the Post Office doesn't delivery here." In 3 years, I've had maybe literally maybe one or two people say FedEx didn't delivery and those were to weird places like inside large universities or park systems.

You are absolutely 100&#37; incorrect, that is a fact. I deal with this every single day.

 

[Nebor]

Better shut down the military. Those lazy good for nothing government employees!

As an active duty soldier, I find the idea of a privatized military intriguing. If you think the military is efficient or cost effective, think again. Ridiculous amounts of man hours and money are wasted every day. We regularly cycle from "we only have $5,000 to spend this month, no one order printer ink" to "we need to spend $80,000 a month for the next three months, everyone make wish lists." Coupled with the 15 hours a week I spend sitting in meetings staring at power point presentations, it's honestly a wonder to me that we're collectively so good at invading countries and breaking things.

I think a privatized military could be much, more more efficient and more effectively run. You wouldn't have so many welfare cases that are next to impossible to chapter out sitting around, soaking up paychecks and wasting good soldiers' time. Plus by privatizing you could decouple the military from certain obligations\limitations it has and broaden it's scope and usability (think operations in the US.) Also you could attract better talent with a more sensible pay structure. As it is now, an F22 pilot, a logistics officer, an attorney, a military police officer and a veterinarian all make the same amount of money. Does that make sense? I think not.

 

[shortylickens]

You're wrong about one important point, "well run" has little to do with being a public or private entity.

For example, the Post Office is well run, it's financial issues come from their mandates to serve all addresses and that they cannot set their own rates to match their costs. But it's a very efficient and effective operation.

And private companies are often poorly run, and if there isn't sufficient competition and an open market, private companies often are less efficient and more costly than publicly provided services. Like in healthcare where private entities overprescribe costly procedures because it's profitable for tthem, not becasue there's much health benefit.

Ummm, the US Postal Service is balls deep in debt.
Do you not read the paper or watch the news, ever?