"Americans get more value from wireless communications than anywhere else." That's the takeaway from a report released on August 24 Future and Roger Entner of Recon Analytics. "What's It Worth To You? Comparing Wireless Pricing in 14 Countries" analyzes recent trends in wireless prices and services in the U.S. and provides an international comparison. The numbers and analysis contained in the report reveal how Americans wireless consumers are reaping increasing value from wireless services and enjoying a comparative advantage than their counterparts in several other nations
As the report points out, in recent years, U.S. wireless consumers are getting more while paying less. For starters, prices for wireless voice services have dropped. "From 2007 to 2010, in the United States," says the report, "wireless voice spending per customer has declined by more than $12 per month and total spending on wireless services has declined by more than $4 per month."
Meanwhile, U.S. consumers are increasingly enjoying wireless data services, such as text messaging and wireless Internet. Although the average American spend approximately $7 more per month on wireless data services in 2010 than in 2007, all told their dollars are stretching even further than a few years ago: "Combining wireless voice and data spend, Americans are spending $4.38 less a month on mobile communications than they did three years ago, while the ability and opportunity to do more with their minutes and their bytes has expanded in an unprecedented way."
Taking the wireless markets in several foreign countries into account, the report provides an interesting comparison by "considering how long the average person has to work for their gross income to equal what they spend on a wireless subscription." And the report concludes that "[w]hen it comes to affordability, Americans lead the world: they can talk more than 19 minutes for every work minute." By contrast, consumers in Canada can only talk 4.6 minutes for every work minute, consumers in the U.K. can only talk for 2.4 minutes for every work minute, and consumers in Japan can only talk 1.6 minutes for every work minute.
The report also provides some interesting insight regarding wireless consumer surplus; that is, "the difference between what people actually spend versus what they are willing to spend," or "the amount that consumers are able to spend on other goods and services and are therefore better off by that amount." According to the report, "[t]he 2010 wireless voice consumer surplus in the U.S. was at least $448 billion per year or $1,480 per wireless subscriber in the United States per year." That's a near tripling of the consumer surplus since 2004.
Developments in the dynamic U.S. wireless market continue to enhance wireless consumer welfare. That's the hallmark of a free market characterized by competition. Numbers contained in the report on advanced wireless services and prices present striking evidence of the U.S. wireless market being "effectively competitive."
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