American consumers pay the highest mobile broadband rate in the world

Mobile broadband in the US is the most expensive among OECD countries, according to a new report by Rewheel. In October 2018, the median gigabyte price for mobile broadband in the US was almost six times as much as the OECD average, with per gigabyte prices on smartphone data plans in the US ranking the fifth highest among OECD countries. The report calls US prices “excessive” and points out that 100 gigabyte mobile broadband plans in Europe cost between $11-22 a month, much cheaper than comparable plans in the US, where, for example, Verizon’s 100 gigabyte hotspot plan costs $710 a month.

The Rewheel report notes that the prices charged by the four US wireless carriers are so high that they resemble prices typically seen in three market network operator oligopoly markets. But US wireless prices will rise if the FCC approves the proposed merger between T-Mobile and Sprint. T-Mobile and Sprint are each other’s biggest competitors. Eliminating their head-to-head competition would mean higher prices for consumers, especially for price-conscious low and moderate-income customers of their prepaid brands, Boost (Sprint) and MetroPCS (T-Mobile). Economists estimate that reduced competition would increase prices as much as 15.5% on the new T-Mobile’s prepaid plans and as much as 9.1% for the postpaid plans.

Links:

The state of 4G pricing ̶ 2H2018 (Rewheel, Oct. 26, 2018)

The T-Mobile/Sprint Merger Would Mean Fewer Jobs, Higher Prices, Less Competition, and Leave Rural America Behind (CWA, Nov. 2018)