Mobile data in the US is almost 20 times higher compared to in Europe

Many of the latest and greatest technologies come out of the US. Streaming services like Netflix have revolutionized the way the world watches movies and TV shows. However, to watch Netflix you need data, and US consumers are paying nearly 20 times more for data compared to Europeans.

For example, people in France are paying around 20 euros ($21.50) per month for a monthly package featuring 50 gigabytes of data, unlimited domestic and international calls to over 100 countries, and unlimited text messages. However, in the US that exact same plan would cost you around $390 per month.

Last year, International Telecommunications Union also reported that the cost of US data was up to 19.5 times more expensive than in Europe. Why is this?

Steven Hartley, Practice leader for Service Providers and Markets at telecoms and IT consultancy Ovum said:

“The fundamental reason is competition,”

Places like France where you can get unlimited data plans for only £27 ($41) have four national mobile carriers. In the US, national carriers do not totally cover the entire country. In some locations only one or two carriers may exist. Basically, since you have less choice, you have to pay more.

Europe has gone out of it’s way to encourage more competition, while the US has not. As a result, many European carriers are very small and have to do anything they can to survive. US carriers do not have the same worries. They have large amounts of customers and it is not a life or death struggle to meet their basic cost.

Sylvain Chevallier, an associate at telcoms specialist BearingPoint consultancy said that places like France have too many carriers for the number of customers.

“To survive the operators must get as many clients as possible, but to do so cut prices. It’s a hellish circle that results in the market losing its value.”

Currently, Europeans may love their cheaper prices, but it may also stop growth as the carriers may not want to invest large sums of money to upgrade and expand their network.

Source: Business Insider

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