Mobile phone call volumes have dropped for the first time in 10 years, according to the annual JD Power survey. The survey, of nearly 3,000 UK mobile phone users, found that pre-paid customers are making an average of 10 calls a week, falling from 14 last year. Contract customers average 27, down from 35 in 2006, but those …
This is probably evidence of bad pricing practices on the part of UK (and other EU) mobile carriers. Sure, when it was brandy-new technology and every mobile second was precious, they could justify those rates, but nowadays it's just a ripoff, using the terminating monopoly to gouge CPP.
Here in the US, mobile usage is skyrocketing. Most people are on block-of-airtime plans, which often exempt in-network and off-hours calls. Some smaller carriers now provide totally unmetered service, which is popular with young people who don't even have a land line. (Land lines here are also usually unmetered, at least for "local" calls.) The result is that wireless carriers in some markets are generating more minutes of use than the wireline carriers!
I think a lot of the growth in the US is due to the wireless carriers' generally competitive mindset. Most markets have about four carriers, just enough to keep them on their toes. (FCC Chairman K-Mart is trying to get that down to three, so they can become monopolistic too, but fourth place T-Mobile is doggedly fighting on.) Wireline providers are less competitive here. And it sounds as if wireless providers in Europe are more interested in gouging for what minutes they can sell rather than in really competing hard.
Contract mobiles over here *can* be competitive, if people are willing to lock themselves into a network: Voda will offer 750 anytime minutes *and* not deduct more than three of them per call when the call's made off peak, for instance, but this does require an 18 month contract (if you're buying a new handset rather than sourcing it elsewhere.)
Texts have *always* been far cheaper than minutes; it's not clear here whether it's simply demographic spread that's lowering ARPU. Perhaps there's simply only so much that people have to say, and only so much time to say it in.
Not so much the most spendthrift.
I've been comparison shopping a lot lately, and Orange are consistently pricier than the other Real Networks. The MVNOs I've not looked at so much...
There's a reason
In the end, everything is data on modern telco networks. It costs a HELL OF A LOT less to move a 200byte txt message (160 characters x 1byte + markup) than it does to stream an audio signal.
I just signed a new contract with Verizon Wireless (stateside) and was pleasantly surprised to find out that they'd added a plan option to add unlimited txts for a $10 markup over the equivalent "normal" plan - this from the same carrier where 100 text messages costs $10 if you add them to the normal plan.
If I were to use all my 450 minutes at 96kbps (just a guess, I'm not entirely sure what the 1xRTT CDMA network's actual voice data rate is) I'd be sending a total of 44,236,800 bytes across the network. But if I were to move all those conversations to text messages, lets say I had to use 1000 of them - they only have to move 200,000bytes of data. At my $80 contract rate, they're charging me $1 for 6912 bytes for voice - or $1 for 2500 bytes in text messages. They make a hell of a lot more from texts.
In practice, text messages are most appropriate for long, drawn out conversations between busy people. I can actually sit down at work and work out vacation plans with one hand and the occasional glance and talking with coworkers and getting actual work done with the other. At the same time, when I need to schedule a meeting or find out why person A isn't at site X, or whatever, it's trivial to pick up the one and call them. Calls are for things that need to become priority #1 *NOW* like "Why aren't you at the warehouse yet?" and "Is 9AM alright for that board meeting?". Texts are for low-priority back burner things like "I can fly out of any airport from NYC to Baltimore without making much difference" or "Your sunglasses are still in my car"
Mobiles are expensive thing in UK
The mobile charges in UK are just too expensive, it cost a huge portion of wages. As I knew, in South Korea, Japan or China, mobile charges including Internet surfing, a giant amount of call minutes (even unlimited) only cost half day's wage in average. But, in UK, it's quite often that you may need to spend a whole day's or even 2 day's wage to pay for a limited amount voice call minutes.
In some cases, the providers are just want to bound their customer with contracts and force them to purchase their handsets.(You never get a suufficient amount of minutes with pay as you go)
Not value for money
If we all sat down and actually looked closely at the yearly cost of owning a mobile phone compared with the benefits we get from having one most people would decide that (business use aside) contracts do not represent value for money.
The whole market is based on hype, I mean, what benefit do most of us really gain from having GPS on a phone or even video calling or Internet access? The cost of owning a mobile phone has gone up significantly for those of us who just want to make calls because we have to pay for all the investment in 'bleeding edge' technologies (3G anyone).
The fact is that our need for mapping today is minimal; the Internet doesn't provide any services that most of us would describe as critical to the success of our lives and nobody wants to make a video call.
People are hopfully starting to realise this fact and, in turn, the telcos will reallise that they need to start competing and providing real value for money.
Dropping ARPU, higher margins
Mr. Goldstein - shut up. You obviously don't know what you're talking about. You can buy all kinds of different pricing plans in Europe including unmetered. An essential difference is that European networks are required by law to cover so many % of the population or so many % of the country so we have well over 90% of the whole of Europe covered by the same technology. I don't know the US figures but the last time I was over you sometimes needed to change phones in order to make a call.
As the European markets have reached saturation it is obvious that prices will start to fall in order to gain new customers. It's less noticeable in the UK than here in Germany where you can get a telephone flatrate (limited to the network and fixed-line) and internet flatrate via UMTS for €50 per month but recent price changes announces by T-Mobile (still playing catch up in the UK) are going the same way. But the major barrier to further price cuts are the OFCOM sanctioned interconnection charges which are designed to allow the networks to get a return on their investment in network infrastructure and spectrum.
The move to SMS is probably being welcomed by the telco's as Mr. Bathgate points out as there are pretty much pure profit and people almost always respond to SMS quickly. If correctly set up e-mail and instant messaging would be much cheaper but you can see the networks fighting tooth and claw to prevent this becoming standard practice. SMS pricing is interestingly pretty much the only area that is entirely unregulated: I think this may be down to the fact that SMS is a side-effect of the network rather than a specific feature. The "bundles" are probably a pre-emptive strike by the networks to keep this unregulated as SMS to non-domestic networks have increased in pretty much every country over the last couple of years and this has not been because the costs have gone up.
It's the time of year
It had to happen, given the time of year many people, and organisations, are catching colds but this one was most definitely pre-ordained. As the effeciency improved, and the number of companies increased it was bound to happen that competition would raise it's welcome head and boot the Dinosaurs into touch. The worst one could say about any company is that it behaved like a nationalised company, that is precisely what BT/GPO of blessed (?) mamory did. Perhaps there might be some who deplore that but it is a fact of life that if you give the punters what they want your cup will be filled to overflowing. Until another comes along the Primrose path with better offers you will prosper, this is what life is all about.
Re: Different stateside
I lived in the States for a while about 5 years ago, and back then at least, I found the cost of using a mobile there a lot more expensive than in Europe.
The most significant difference I found was that I had to pay to *receive* calls as well as to make calls. Another difference I remember was going into cellphone stores asking what the tariff for sending text messages to Europe was, and they were like "what's a text message"!
I believe things have changed significantly re:text messaging Stateside since i.e. it is now available and used. Having to pay for receiving calls still puzzles me however. I had a prepay phone at the time and one time I had 50c credit left (enough to make a 1 minute call back then), and someone called me with a wrong number, and by answering it I used all my remaining credit! (calls were billed per-minute) I'm sure things have improved in 5 years, but back then I found the cellphones a lot more expensive Stateside.
Ain't texting long winded
It must be me, then!
Think about it - a text exchange of half a dozen texts will cost each user, whereas you can probably say everything you need to in a 30 second call - costing much less!
As I said - it must be me!
Not Value For Money!!
People don't use their mobile for calls because its simply too expensive compared to a landline. Yes companies offer talk plans providing you agree to stay with them 18 months in some cases but its STILL expensive...
The cost of a mobile call does not reflect anywhere near the cost for an operator to provide that call even with termination charges etc
Even a text at 10-12p is expensive, when it costs the company coppers to actually send the message. Its just another example of RIP OFF BRITAIN!
But the thing is if we are daft enough to pay excessive prices its our own fault, We must enjoy being bled dry.
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