U.S. Consumers Pay 50 Percent Less For Mobile Than 10 Years Ago

mobile phone pile

Consumers have seen the benefits of stiff wireless competition in the U.S. and as a result, paid 50 percent less in 2009 than they did in 1999 adjusted for inflation. They also have better coverage. But according to the General Accounting Office, which released a report today on the wireless industry, there are still some concerns about consumer choice.

The intention of the 57-page report was to evaluate whether consumers are protected from harmful practices. In the past 10 years, not only have Americans increased their reliance on wireless (nearly 40 percent of households have dropped their landline), there’s been a tremendous amount of consolidation in number of operators. The GAO said it collected and analyzed data and documents from a variety of government and private sources; conducted case studies in both rural and urban areas; and interviewed stakeholders representing consumers, local and state agencies and officials, and various segments of the industry.

In conclusion, the GAO recommends that the FCC monitor more aspects of the industry on an ongoing basis to improve reporting capabilities and have a better grasp of what’s going on. Suggestions included tracking prices, special access rates, capital expenditures, and equipment costs. In particular, the GAO raised concerns about the practices of some carriers, such as early-termination fees and handset exclusivity arrangements (cough, iPhone).

“The biggest changes in the wireless industry since 2000 have been consolidation among wireless carriers and increased use of wireless services by consumers. Industry consolidation has made it more difficult for small and regional carriers to be competitive. Difficulties for these carriers include securing subscribers, making network investments, and offering the latest wireless phones necessary to compete in this dynamic industry. Nevertheless, consumers have also seen benefits, such as generally lower prices, which are approximately 50 percent less than 1999 prices, and better coverage.”

The CTIA — The Wireless Association issued a statement that widely agreed with the GAO’s findings. CTIA President and CEO Steve Largent, said:

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