Wireless Carrier price fixing?

[John Kotches]

I've been doing some shopping on carrier costs and plans and what I come up with is that there seems to be price fixing in play. There really isn't much differentiation between the bottom line prices for consumers. Here's what I found for the various carriers. This is exclusive of handsets. This is for 4 smartphones with 10GB of data between them. Unlimited voice, unlimited text except for Sprint. They still don't offer a "reasonably priced" unlimited voice plan for families. This is exclusive of my corporate discount -- and wouldn't you know it, that's within 1% of one another as well.


ATT:
10 GB DATA $120
4 Smartphones $120
Total $240

Verizon:
10 GB Data $100
4 Smartphones $1
Total $260

T-Mobile:
10 GB 4G Data: $240
4 Smartphones: 20
Total $260
Note: They once again have an odd meaning to the word "unlimited" as they limit you to 10GB of data at 4G Speeds. Read the fine print.

Sprint:
Unlimited Data + 1500 minutes $150
2 Additional Smartphones $60
Total $210
Note: Forget unlimited voice on Sprint, that's > $400 / month for 4 lines.

So is it me, or are they price fixing?

 

[TheForce]

Well, you found a combination of Verizon and T-Mobile that has the same rate but I don 't see pricing similarity among the others. $240 : $260 :$210

For travelers- Best coverage would be#1 VZ, #2 ATT, and probably a tie on T-Mobile and Sprint but I didn't compare those last two. For local use it all depends on your location.

FWIW- I have 4 smart devices on my VZ account and pay $197 before taxes 6GB service.

 

[John Kotches]

Don:

I didn't "find" anything, those are the published rates. T-Mobile calls theirs "unlimited", yet you're restricted to 10GB of 4G data. Sprint's is an outlier as their only unlimited voice contract is still hideously expensive for multiple lines (about $100 a line with no real breaks for multiple lines).

This is not about the price, but rather the lack of significant variation between them for comparable services.

 

[nelson61]

The fit and follow the economic definition of an oligopoly.

A few players control the market with closely grouped and stable pricing.

When one raises prices, the others do not, hoping to gain market share.

When one drops prices, the test follow to protect market share.

After a few tries, the rebel gives up and they all remain in a grouped price range with little reason to venture out of the box.

 

[Tampa8]

I'm not sure you can just go on price. For instance while price may be similar, I would pay quite abit more with Verizon over ATT because of the rollover, and I can call any cell phone not just ATT for free, and of course free night after 9PM and all weekend. That allows me to have a smaller family plan. And your complaint is about unlimited - I don't need unlimited. They also give me a free cell repeater so I get a good signal at home. Neither ATT or Verizon have a great signal there, but Verizon wouldn't do anything, ATT gave us the device free.
Then there's the issue of coverage, almost non existant for Tmobil in alot of Eastern Ct, spotty for Sprint. ATT an Verizon are close most places I travel, but ATT works better in buildings for some reason. So you have to compare the actual overall service, or value too. They are not all the same.

 

[John Kotches]

Tampa8:

Rollover minutes are irrelevant to a new customer on current plans. New shared data plans give unlimited voice and text messages. The cost is in delivering the data needs, not voice / text which are mundane in comparison.

I'm switching away from Sprint for several rea sons, not the least of which is that I want to go away from metered minutes so that I can carry a single phone instead of two.

 

[John Kotches]

nelson61:

Thanks, didn't know the term, but that is precisely where I intended to go with this. Is this a natural market evolution for commoditized services?

 

[nelson61]

nelson61:

Thanks, didn't know the term, but that is precisely where I intended to go with this. Is this a natural market evolution for commoditized services?

They teach it in economics classes. One step down from a. Monopoly. I think it occurs in high capital cost businesses. Used to use steel as example before the electric furnace made small mills viable. Airlines are the classic example today.

 

[TheForce]

Don:

I didn't "find" anything, those are the published rates. T-Mobile calls theirs "unlimited", yet you're restricted to 10GB of 4G data. Sprint's is an outlier as their only unlimited voice contract is still hideously expensive for multiple lines (about $100 a line with no real breaks for multiple lines).

This is not about the price, but rather the lack of significant variation between them for comparable services.

My use of "what you found" was in response to your statement " what I come up with". Sorry if I misquoted you.


nelson61 correctly described the system as an oligopoly, half way between a monopoly and free market capitalism and how they get so close to one another. In the US monopolies are price regulated by the government in the strictest sense, e.g. Utilities and in many communities cable TV. Cell phone companies are loosely regulated by the government, i.e. their rates are subject to government approval. They are an oligopoly, or small group of companies selling similar products or services. Other oligopolies are like radio and TV broadcast.
The world of free market capitalism in the purest sense is not regulated on pricing, but may be subject to regulation of product quality and design.

 

[JerseyMatt]

Tampa8:

Rollover minutes are irrelevant to a new customer on current plans. New shared data plans give unlimited voice and text messages. The cost is in delivering the data needs, not voice / text which are mundane in comparison.

I'm switching away from Sprint for several rea sons, not the least of which is that I want to go away from metered minutes so that I can carry a single phone instead of two.

You do realize you get unlimited "Any Mobile Anytime", right? This day in age, the majority of most peoples calls are mobile to mobile, so you barely touch the "pool". I have the share 1500 plan, and between the 4 phones we use over 10,000 minutes a month.. Hardly any of which are actually plan minutes, since basically every number we call is a cell.

 

[mike123abc]

I have to agree, I use 5-10x free mobile to mobile minutes over minutes actually charged to my monthly allotment. I now have the minimum plan on minutes (450). Most months I come in under 150 minutes on the plan with 800-1200 minutes of free mobile to mobile or night and weekend. No one I know has a voice line any more. The consumed minutes are only when I have to call a business or something with a real line.

This is why ATT and VZ now want to push you into unlimited voice/text with pay per GB of data. They see the talk and text are dying off fast.

 

[LER]

You do realize you get unlimited "Any Mobile Anytime", right? This day in age, the majority of most peoples calls are mobile to mobile, so you barely touch the "pool". I have the share 1500 plan, and between the 4 phones we use over 10,000 minutes a month.. Hardly any of which are actually plan minutes, since basically every number we call is a cell.

I have 5 phones on a Sprint 1500 Minute family plan, and used 13 total Anytime Minutes last month between the 5 phones. There are over 1000 minutes of Mobile-to-Mobile.

The unlimited everything else works for me.

 

[John Kotches]

You do realize you get unlimited "Any Mobile Anytime", right? This day in age, the majority of most peoples calls are mobile to mobile, so you barely touch the "pool". I have the share 1500 plan, and between the 4 phones we use over 10,000 minutes a month.. Hardly any of which are actually plan minutes, since basically every number we call is a cell.

Matt:

I'm looking to roll 2 phones into 1 with google voice. One of the lines is my company line and that logs a lot of minutes in conference calls on a monthly basis. Every Wednesday I have 5 hours of scheduled conference calls. I have additional standing conference calls on other days as well.

As I said, metered minutes are bad for me for my needs.

 

[John Kotches]

I have 5 phones on a Sprint 1500 Minute family plan, and used 13 total Anytime Minutes last month between the 5 phones. There are over 1000 minutes of Mobile-to-Mobile.

The unlimited everything else works for me.

Doesn't work for me -- conference calls are metered minutes.

 

[John Kotches]

I have to agree, I use 5-10x free mobile to mobile minutes over minutes actually charged to my monthly allotment. I now have the minimum plan on minutes (450). Most months I come in under 150 minutes on the plan with 800-1200 minutes of free mobile to mobile or night and weekend. No one I know has a voice line any more. The consumed minutes are only when I have to call a business or something with a real line.

This is why ATT and VZ now want to push you into unlimited voice/text with pay per GB of data. They see the talk and text are dying off fast.

It has nothing to do with talk and text dying off fast. It has everything to do with the bandwidth required to deliver talk and text vs. data. Your call ties up a maximum of 64Kbits/second assuming they are using DS0 rates. That's not much bandwidth. Text traffic is bursty and small. Still not a lot of bandwidth required.

On the other hand, data is big bandwidth and that's where the costs are right now for the Mobile providers. The ATT/Verizon pricing prioritizes fees for their highest service costs.

 

[mike123abc]

http://gigaom.com/2012/07/17/the-mobile-operators-dilemma-and-opportunity-the-fourth-curve/

For much of the last three decades, voice has dominated the revenue streams for almost all operators. However, in 2013, the global voice revenues will fall below the 60 percent threshold. So far, the drop in voice revenues has been compensated by the rise of messaging revenues and the data access revenues. However, some nations and operators have started to experience declines in messaging revenues as well.

The first revenue curve of voice is already in decline for a majority of the developed markets like the U.S., Japan, and Western Europe. The second revenue curve of messaging is on the decline in some nations like the Philippines, Netherlands, Taiwan, Spain, and Italy while approaching saturation in countries such as the UK, France, and the U.S. Both of these curves are on the rise in developing countries, which are still in the subscriber growth phase.

From VZ's investment page http://www22.verizon.com/investor/industryoverview.htm (chapter 3) annual mobile voice revenue has fallen $4 billion in the past 5 years

 

[JerseyMatt]

Matt:

I'm looking to roll 2 phones into 1 with google voice. One of the lines is my company line and that logs a lot of minutes in conference calls on a monthly basis. Every Wednesday I have 5 hours of scheduled conference calls. I have additional standing conference calls on other days as well.

As I said, metered minutes are bad for me for my needs.

OK I see what your saying..

Now.. since you mention Google Voice, there's an interesting solution you could use. I use an app called GrooVe IP, which allows you to make and receive calls through Google Voice over WiFi or 3g. The way I use it is so that I am able to answer my business line (Vonage line that SimulRings my Google Voice number) with my cell if I'm on the road (basically my cell now has two phone numbers that ring differently and either can be used to call out).

It might be worth looking into, that way you can use Google Voice for your conference calls and not burn plan minutes.

 

[LER]

I was going to suggest that or one of the other VoIP solutions (IBM (where I work) has it's own softphone solution). There are many on the market.

 

[JerseyMatt]

And no, I did not do the Google Voice/Sprint integration. I kept my Sprint number and got a new GV number. That is what allows me to have the distinctive ringtone for each number.

 

[John Kotches]

Matt:

You seem to want to keep me on Sprint. No LTE here and no target date. They have blown it with me, so you can take them off the table.



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