Europe's top business eurocrat Neelie Kroes has expressed her shock that poor Romanians pay less for phone calls than wealthy Germans. Her office highlighted the disparity and used the figure to call for greater regulatory intervention by the European Commission (i.e. Neelie Kroes). The European Commission vice president …
Suppliers charge what the market can afford
But it's a bummer when you find you can call a mobile in the UK from India more cheaply than you can from the UK.
Not sure if its still the case, but was when I first got a Indian SIM during a visit.
(Don't even think what calling a UK mobile from India on a UK SIM costs)
Apple has founded its whole business on the relative "lack of awareness" of its customers. Could it be a reason for the success in America?
I wasn't aware this article was about Apple
But I guess for the haters who live for the fix of their next chance to put them down anonymously on the internet, every article can be linked to them somehow.
BTW, I'm quite aware of the alternatives and chose to own an iPhone. I chose to run Linux on my PC/laptop, so I'm not some blind Apple fanboy who buys everything they sell. I feel the iPhone is the best phone, others have a different opinion because they weigh things differently than I do.
I guess by your logic Microsoft took advantage of YOUR lack of awareness when you bought a Windows PC (I assume you have one, since Linux has only 1% desktop share and you obviously hate Apple too much to use a Mac)
Lack of awareness
The people I know who have acquired macs mostly did so because they liked the interface and because it just worked. They have absolutely no intention of opening it up, expanding it, upgrading it bit by bit.
If it breaks, they take it to me (alas) and then to the nearest Apple store. Furthermore, if past experience is anything to go by, they will use it for about 5 years until it breaks down or they are given a new one.
They are well aware that PCs are cheaper and could have gotten one for less.
Apple's success in the last 10 years has been due to iPods, iPads and iPhones. Mac sales are higher than before, but not that much higher. Apple designed and marketed devices that people wanted to have and liked to use. They were at the pricier end of normal and they were considered items worth spending a little bit more on. The iTunes store and massive number of non-buggy apps made for a very comfortable experience.
How much per minute?
As I have a contract, how much I pay per minute of phone call varies greatly depending on how many minutes of phone calls I make in a particular month.
Some months, its not many, so it may seem ridiculously expensive per minute if you just divide the contract cost by the number of minutes I used - until you factor in that the cost of a contract includes things other than voice minutes that are actually more valuable to me.
"For example, a litre of milk can be bought for between €0.69 and €0.99 wherever they are in the EU"
Not in Luxembourg. It's ... uuh (checks bill) 1.28 EUR. The poor country is suffering from aggravated inflation and a housing bubble, both fuelled by an expanding foam of well-paid (but rarely in the office) civil servantry and Eurocracy. Not to mention bankistas.
I actually expected Nelly to come down hard on the inter-operator roaming fees, which are amazingly high in Luxembourg. UGGHHH.
Not in Ireland either
In Ireland it's €1,19 to €1.27 for a litre of milk depending on where you are.
In Romania, the operator deals just tanked - they're all pretty bad now allegedly due to some government regulation. The operators all offer similar deals and none of them are good.
1.16 - 1.24 for fresh milk. UHT is cheaper.
> Not in Luxembourg. It's ... uuh (checks bill) 1.28 EUR.
Is that with or without VAT? What is the rate in Luxembourg?
Mobile calls are far too cheap already
It is all too rare to go on a journey on public transport without at least one loudmouth continuously yammering away throughout the whole journey. I imagine it is the packages with N-hundred so-called free minutes that are the problem. I'd welcome an EU wide tax of a couple of cents per minute on all mobile calls. Not enough to hurt for necessary calls, but enough to make people curtail the length of their trivial chat.
Re: Mobile calls are far too cheap already
"It is all too rare to go on a journey on public transport without at least one loudmouth continuously yammering away throughout the whole journey"
In some towns the same applies to movie theatres.
Another subsidy effect...
Taking countries with similar spending power, Finland (6.1) is less than half of Netherlands (14.7), and significantly lower than UK (10.1). Of all the highly-industrialised, service-based economies with mature, competitive mobile markets and high customer spending power, Finnish customers get the best service rates .
One possible explanation: Finnish operators are notable for not providing subsidised handsets to customers as part of their contracts. You want that phone; you pay for it yourself - at full retail price.
So, not only is there no such thing as a free lunch, there's also no such thing as a free iPhone. But worse, people who can't afford the fancy plans with "free" phones get to subsidise those who do. It's time to end this scam.
Re: Another subsidy effect...
people who can't afford the fancy plans with "free" phones get to subsidise those who do
Few people can be bothered to upgrade their phone or switch plans at the end of the contract period*. Even if you do, the total cost is usually more than you would have paid if you'd bought the phone and used a SIM-only contract.
So the subsidy is likely flowing the other way.
*This certainly applies to me and to everybody I know. Phone contracts are like gym membership - you overpay because you don't finish the contract when you could.
"Suppliers charge what the market can afford"
Only monopolists or oligopolists can get away with that.
Look at e.g. the oil market. Buyers in the UK can afford a higher price for oil, yet miraculously we pay the same price (excl. tax) for oil as the Latvians. That's because oil is fungible and is traded in a competitive, market. Phone minutes/texts/data are fungible too, so the market should be just as competitive.
One way to ensure a competitive market would be to allow users to change network instantly, e.g. via a setting in their phones. Within no time at all the price of minutes, texts, and data would tumble to just above cost price.
Re: "Suppliers charge what the market can afford"
phone minutes aren't just not fungible.. they arent even tradeable as they don't actually even exist as a commodity... for instance, you can't move minutes between phones, let alone networks.. .imagine if I had 3000 minutes a month on my phone.. and then I was able to sell them to you? if I did then they would be fungible.. as I wouldn't mind what kind of minutes I got.. or where from.. as long as I could trade/move them. However, they are assigned to 1 person and then can't be traded/moved.
it's a lie to think of them as units.. they are actually just a way for a supplier to segment a service so that its easier to charge.
Which is very very clever, seeing as we all think of them as something which actually exists as a commodity.
Off Set Handset costs maybe?
How much of the "Rich" nations cost per min is used to offset handset costs to manufacturers. I'm sure ever free handset in Lativa is not a S4 or even a S4 mini.
On giffgaff its cheaper to call abroad than for a local call. (3p to the usa 10p within the UK.) Its just weird.
Just back from Spain. Took two UK PAYG mobiles and a third Vodafone Spain one. It was cheaper to make calls between the UK mobiles than it was to call a Spanish landline from the Spanish one.
The very existence of this kind of thing is pretty much smoking-gun evidence of a cartel / price fixing in operation.
Economics for Dummies, Again....
I recall a similar story when the EC Anti Trust authorities were complaining about the fact that an iTune in the UK cost more than an iTune in France - a full 5p more. Shock horror gasp.
They issues a Statement of Objection which is like holding a gun to one's head but forgot about one very simple concept, even more simpler than the one forgotten about in this article.
And yes, exchange rates change over time.
What was the name of the person heading up anti-trust at that particular time...? Neelie something...
Re: Economics for Dummies, Again....
Exchange rate fluctuation don't apply to the 21 countries in that survey that either use the Euro as their national currency, or have their currency exchange rates pegged to the Euro. And the biggest disparity between similar economies is between two Eurozone countries: Finland and the Netherlands.
Inconsistency in European policy
Eurocrats have banned "grey market goods" or goods that sell lower in one market being exported to another. I believe levi jeans were the classic case back in the 90's.
In the 2000's they have moved on to services but with a reverse policy stance "we all should pay the same" with mobile phone providers the poster child for bad practice.
Any other bureaucracy would be embarrassed by the double standard.
Re: Inconsistency in European policy
Their stance has not changed, simply because there is no ban on parallel importing within the EU. For over twenty years now, we've had quite the opposite in fact: the Single European Market regulations have made it illegal to block free movement of goods within the EU.
One example: prescription drugs are quite expensive in Ireland, so my local pharmacist sources stock from a company that buys the same drugs in Italy, Greece and Spain, where medicines are much cheaper, and re-packages them with English instructions. A grey import, but all legal and above board, and actively encouraged by "the Eurocrats".
Mobile charges are a tax
Calls, once you get in to the fibre optics is basically free. The cost is shared between so many users. It is the local loop . Mobiles have a radio local loop which is a lot cheaper than running copper to the home. But it uses a limited resource - the frequences - which is under government control. They control who can do what, and they sell this authorisation. So the telos are only recovering the telephone tax, same petrol in Europe.
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