Why don't cell plan prices drop?

[.JahJahwarrior.]

Overtime, computers have gotten smaller and faster, and cheaper. Over time, almost everything does. But, a year or two ago, it seems to me that cell phone plan prices were about the same as they are today.

It didn't bother me a year ago. Now, when my girlfriend is in another town without internet for three days of the week, it does. I have a pay as you go plan because I don't use the phone much, but I do use it most every day. Ten cents a minute adds up--we chatted for 5 minutes tonight and there goes fifty cents...when it would be free if I had a $30/month plan because it's after 9pm. But, in order to save that $.50, I have to pay $30 a month when I almost never use even 200 minutes a month.

If I had the plan, I'd use the phone a lot more, but I don't need to, and I can't afford $30 a month....still, I'd like to be able to talk to the girlfriend without cringing every minute as I watch the balance in my account get lower and lower...

I just don't get why internet has gotten cheaper over time, but cell phone plans haven't.

 

[r.j.s]

Cell phone plans have gotten cheaper, for the amount of time you get, as well as the network coverage and quality (generally).

when it would be free if I had a $30/month plan because it's after 9pm.

Like you said, it's $30/month - whether you use the minutes or not, so it really isn't free.

 

[neiltc13]

The network I used to be on (Orange) allowed you to change tariff after you had been with them for six months, even if you still had many months remaining on your contract.

 

[steve2112]

Prices don't drop because it's a service. Computer prices drop (except Macs ) because material prices drop as new technology comes out. Service prices don't drop unless the market demands it. I've been with the same ISP for about 6 years, and the monthly price has remained about the same. Cable/Sat TV service hasn't dropped, either. In fact, one of the reasons I ditched my satellite service was they raised rates two years in a row, and I decided it wasn't worth what they were charging.

Until one of the major carriers decides that they can increase profits or gain more customers by dropping prices, it won't happen. They tend to follow each other on things like that. Witness the "Everything plan" Sprint came out with a while back. I believe all the major plans now have plans with unlimited voice, text, data, etc.

 

[Tomorrow]

There's also less competition in the wireless market. Until a major player comes in with very comparable service for a substantial discount (like less than half price), there's not as much incentive for the carriers to lower their prices.

There for a while (and I guess to a certain extent today) every Tom, Dick, and Harry was assembling cheap computers and getting them on the market, and forcing the heavy hitters to roll out some price-comparable models. Think back to trash like eMachines for an example.

 

[iPhoneNYC]

The cell providers used to have home phones and long distance to pad their bottom lines. These have dropped off. They are willing to give you more minutes but find as much as possible to charge for from ringtones to international roaming. Cable companies are in the act. I ouldn't expect to see a price drop - just find the cheapest plan that works for you...

 

[hexonxonx]

Yes, the prices are very low these days. Back in 1993 when I first got a cell phone, it cost me $179 for 700 minutes. Long distance wasn't included and roaming was unbelievably high.

 

[.JahJahwarrior.]

True, quality has gotten much better. This is one of the things though that I expected to drop the price somewhat. For example, it used to be that processing one phone call would take up X amount of space. Today, it still might take up X amount of space. However, ten years ago they didn't have that much space, say, 10X. Nowadays, shouldn't they be able to process so much more data that to accept one more phone call on their services wouldn't cost them even nearly ten cents for every minute?


RJS--yes there would be a large fixed cost, but the variable cost would be 0 during those "unlimited" times, so I could talk as much as I wanted without worry about additional cost. I just wish the fixed cost were lower, I suppose.

 

[Azmordean]

From what I have seen, prices have dropped, but not directly. Let me clarify. A few years ago, $30 a month may have gotten you 200 minutes. Now it gets you say 350 minutes. Thus, you ARE getting more for your money than in the past.

However, for users who don't use it a lot, the savings aren't noticed, because the "price of entry" is the same. That is, $30 a month is still the minimum you can pay.

 

[steve2112]

True, quality has gotten much better. This is one of the things though that I expected to drop the price somewhat. For example, it used to be that processing one phone call would take up X amount of space. Today, it still might take up X amount of space. However, ten years ago they didn't have that much space, say, 10X. Nowadays, shouldn't they be able to process so much more data that to accept one more phone call on their services wouldn't cost them even nearly ten cents for every minute?


RJS--yes there would be a large fixed cost, but the variable cost would be 0 during those "unlimited" times, so I could talk as much as I wanted without worry about additional cost. I just wish the fixed cost were lower, I suppose.

While all that is technically true, it basically boils down to this: Cell phone companies don't lower their prices because they don't have to. In the US, at least, they all play follow the leader. When one company does something, the others wait a bit to see the results, the follow suit. For example, a while back one company (AT&T I think) raised the rates for text messages over your limit from 10 cents per message to 20. Within a few months, all the major carriers had followed suit. The same thing happened with laptop data plans. For a long time, Sprint and Verizon offered unlimited 3G data plans. Then one company (Verizon or AT&T, I forget) introduced a 5GB cap on their plan. Again, within a few months, all the carriers had done the same. Why? Because they can, and they know they will get away with it.

Let's face it, in the US, the major carriers are all the same. Most people choose based on equipment (what phones they offer), coverage, and customer service. And most of these people aren't going to go completely without a cell phone. The major carriers know this, and really don't care about dropping their rates. Oh, and if DO decide to change companies, you have to PAY for doing it if you are in a contract. I won't even get started on that rant.