You are being royally ripped off by your cell phone carrier

UPDATE: So FREE, the French cell phone company I rave about below, dropped me and canceled my account for “non-payment,” except of course my bank records show that they charged my card successfully each month up until they dropped me, and the account had far more money than the $25 monthly fee in it.  So your guess is as good as mine.  Unfortunately in France, much more so than in the US, there’s no one to complain to when companies wrong you.  (Not that American cell phone companies are gems.).  So while I was ecstatic about FREE’s pricing and service, I’m less ecstatic now.

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You are being royally ripped off by your cell phone carrier.

What’s wrong with this picture?

This is my iPhone with my French plan
that costs only $26 a month. How much is yours?

Unless you’re paying $26 a month for unlimited phone calls, unlimited text, free international calls, and 3 gigs of data, per month, you are being royally ripped off.  Because that’s what they pay in France for far more service on their iPhones, and other phones, than we pay in the states for three times as much.

I pay $89 a month or so for my Verizon iPhone mobile plan in the states. That covers 450 minutes of call time a month, 2 gigs of data, and a set number of text messages (and I can’t even confirm how many) – and being an American carrier, I am charged minutes for calls I receive. And don’t even think of calling anyone abroad, I don’t even want to know how much it costs. Also do NOT use your phone abroad, or it will cost you $1.29 a minute (or you can pay extra for a “special” deal that will “only” cost you $0.99 cents a minute). And if you use your cell phone’s data/Internet plan abroad, well, you’d better take out a second mortgage on your house to pay for it.

Then there’s my new French mobile plan from a company called FREE. (I travel enough for work that it’s been worth it to have a plan over here.) My FREE plan, that I use on the same Verizon iPhone, costs me 19.99 euros a month, or US$26 at the current exchange rate (if you have their home Internet service, it’s only 15.99 a month).

Keep in mind, this is for my FRENCH cell phone plan that’s based in France, I can’t use it in the states.  I’m just trying to show you what home-country cell phone plans cost in other developed countries that some of our countrymen like to consider inferior.  If it’s $26 in France, why is it $85 in the states for less?

And what do I get for only $26 a month?

– Unlimited minutes for calls in France, to both cells and landlines.
– Unlimited minutes for calls to the US and Canada, both cells and landlines.
– Unlimited minutes for calls to landlines in most of Europe.
– No charges for calls received.
– Unlimited text messages and SMS in France.
– 3 gigs of data a month, then they throttle you down.
– You automatically connect to the company’s wifi all over France and its territories.
– And I’m pretty sure you can set up your phone as a personal hotspot for free too (it just comes out of your 3 gigs a month).
– There’s no minimum contract – you’re charged each month until you cancel.  So if you want to get the plan for a week-long trip, go ahead (though you have to register it with a French address, and do it online as they have no physical offices).

Call it the Freedom Phone.

Oh, and it was painfully easy to sign up.  I just went to their Web site, entered my credit card, put in a local French home address, and when I arrived here I had a letter waiting for me (took about ten days to get), took the SIM card they sent me (the card is compatible with large size or micro SIM, you just punch out the size you need), put it into my phone, then went to their Web site and clicked the ‘activate’ button – and voila, it worked. It was that simple.

Why can a French company charge 1/3 the price of a US company to offer iPhone users a better cell phone plan?

And why haven’t we had congressional hearings about why American consumers are being reamed by our phone companies?


[UPDATE: Someone raised the point that I "only" paid $300 for my iPhone, rather than $600 or $700, because AT&T; and Verizon are subsidizing the cost of the phone, and somehow that skews the comparison of French and US cell plans.  Not really.  First off, check out the phones the French cell plan works with - far more than just the iPhone.  And check out the prices of the other non-iPhone phones in France, some are as low as 39 euros, or $50 bucks or so.  Try getting a phone plan like this for your 39 dollar phone in the states, with no contract.  Good luck.]

Folks, Americans need to wise up.  We are being royally ripped off, compared to the rest of the world.  When I tell people here that I pay Comcast $180 a month for home Internet and cable TV (and I don’t even get the premium movie channels), they laugh, since folks here pay $30 a month for high speed 100 megabyte fiber optic Internet, cable TV, and phone service (that includes unlimited calls around the world) combined.

We should be embarrassed, and then outraged, by how badly we are being cheated by American phone companies and Internet providers.  70% of Americans don’t own a passport, and with our lousy number of vacation days compared to Europeans, it’s no wonder – it’s a long flight to Europe, and who has a week of vacation time to spare, especially once you have a family?  But while our isolationism is understandable, we pay a serious economic price for it.

Americans have no idea how badly our own corporations are ripping us off.

(PS In good news, I was able to unlock my Verizon iphone, for international SIM cards, by simply calling Verizon.  Again, it only works for international SIMs, not for US competitors of Verizon, but at least that’s something.)


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Google+ | LinkedIn. John Aravosis is the editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown (1989); and worked in the US Senate, World Bank, Children's Defense Fund, and as a stringer for the Economist. Frequent TV pundit: O'Reilly Factor, Hardball, World News Tonight, Nightline & Reliable Sources. Bio, .

Share This Post

  • http://AMERICAblog.com/ John Aravosis

    It is to Americans who haven’t traveled. They think it’s expensive but have nothing to compare to. Now they do.

  • Ted in Dallas

    You are being royally ripped off by your cell phone carrier…That’s not really news.

  • Bala

    I’m in India and I’m an Android guy, but I thought you’d want to know what we get around here. Almost everyone here uses prepaid connections, so here’s how it works. I walk into any electronics store and there are phone company reps sitting around there.

    I show them an ID, pay around $0.75, get a SIM. My Android phone (equivalent to an iPhone in almost every way) costs me about $175. I insert the SIM in the phone and wait a couple of hours, and it gets activated. Remember the 75 cents I paid for the SIM? That’s now in my prepaid account. I can then use a credit card to pump in more cash into my account – typically, they give you $1 worth of prepaid credit for every ~75 cents you pay.

    Now, for the charges. I don’t use the phone, I don’t pay them anything. Incoming calls? I pay nothing. Outgoing calls across India are billed by the second, and I have to pay – I’m not kidding – 1.1 CENTS PER MINUTE. Also, you can use your prepaid credits to purchase special plans. What special plans? Unlimited talktime, unlimited messaging for a month. How much? $10. What’s that? You want 5 gigs of 3G data, too? Sure. Just add 2 dollars to that. And at the end of the month, you get to choose whether you keep the plan. Also, Indian operators couldn’t care less about tethering. Which is why I don’t have an internet connection at home. I use my phone’s personal hotspot 24/7, and if I exceed the 5 gig limit, all I have to do is shell out another 50 cents for another gig.

    That kinda explains why we’ve got such amazing cell phone penetration in this country – there are more cell phones than toilets in India. No kidding. 4 out of 10 Indians earn less than 2 dollars a day, but 9 out of 10 Indians own a cell phone.

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