North Americans pay more for cell phone service

Americans and Canadians pay more for cell phone service than people living Scandinavia.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
2 min read

Cell phone users in the U.S., Spain, and Canada pay more for mobile phone service than cell phone users in other parts of the world, according to a survey published by the Organization for Economic Cooperation and Development.

The OECD surveyed mobile carriers in its 30 member countries. The report showed on average how much consumers spend over the course of a year.

For a consumer subscribing to a medium-use package that provides about 780 voice minutes, 600 short text messages, and eight multimedia messages, the survey found that the monthly price of service ranged from $11 a month for service in the Netherlands to $53 a month for service in the U.S. as of August 2008.

On a yearly basis, American cell phone users are spending about $635.85 on cell phone service. Spanish cell phone users pay about $508.26 for the year. And Canadian cell phone subscribers pay about $500.63. By contrast people in the Netherlands and Finland pay the lowest amount for cell phone service, only $131.44 per year. And cell phone users in Sweden only pay $137.94 per year.

Prices for mobile phone service have steadily been decreasing over the years. The survey indicates that between 2006 and 2008 mobile phone voice prices fell on average about 21 percent for low-usage consumers, 28 percent for medium usage, and by about 32 percent for subscribers with the highest consumption patterns. Text messaging continues to be a lucrative business for mobile operators, the report also says.

But the results of this survey also highlight the continued gap between what cell phone users in North America pay versus what they pay in other parts of the world, such as in Scandinavia. This shouldn't come as a huge shock given that Europe has typically offered cheaper domestic plans than American providers. But it's somewhat surprising that Spain ranked as the second most expensive place in the world for mobile service.

It is likely that the U.S. will continue to be the most expensive country in the world to use a cell phone. As carriers build faster 4G networks, they are likely to increase prices on higher-end services. But if the economy continues to get hammered, more consumers might turn to lower-cost prepaid services that offer flat-rate pricing.

These plans have become more popular recently. And there are signs that increased competition may drive down prices on these services. But even though they offer a good value, they are still not used by the mainstream. And most U.S. cell phone users subscribe to a post-paid plan.