Tuesday, November 17, 2009

Why Cell Phone is Expensive in USA?

One of the striking question to international student as well as resident american people in USA might be the question posted in the title:
Why Cell Phone is Expensive in USA?
India, for example has very very cheap price on cell phone services. Sujan jee had a nice post on this topic http://sujanacharya.blogspot.com/2009/11/blog-post.html .

For the people living aboard, calling home by calling card is another painful story. That can be written in different post. However, the question on why cell phone is expensive in USA had been ringing in my head for long time.
My first had approach was the following:
  • USA is a big country
  • needs a lot of resources to relay calls
  • Making average cost per call go high
However, since there are many big service providers such as AT&T, Verizon, T-mobile, Sprint etc. one would expect fierce price war. Where is the price war???

Below is the NY times article which discusses why not?

Well, one of the factor is consumer itself.

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