Wednesday, September 26, 2012

The high cost of cell phone services in the US

The Online Wall Street Journal (India Edition) carries an article today (Sept 26, 2012) saying that cell phones are eating away the (US) family budget! Visit
This article quotes Labour Dept statistics and says that the average household’s annual expenditure on telephone services rose to $1226 in 2011. It carries a small graph showing that expenditures went down during 2007-2011 on vehicle purchases, apparel & services, entertainment and food away from home, while expenditure on telephone services went up over 10% during this period. It discusses the role of smart phones in all this.

I wish to juxtapose this with other information in my previous blog posting:
In that posting, I had argued that despite big noises being made over the media, the average Indian cell-phone user spends less than 50 US cents per month on Mobile Value Added Services. Of this, mobile apps and games accounted for less than 10 US cents. The bulk of the 50 cents went into such things as ringtones and SMS-based applications.  

My blog posting had argued that we should not believe that India has suddenly become a nation of Internet users because everyone carries a cell phone.  Important applications such as education and timely information dissemination will need to use services such as SMS for years to come, to cover the population satisfactorily.
Mobile Internet does cost money, even in the US – to the extent that the Wall Street Journal links increase in telecom expenditure to reduced expenditure on food away from home. I only ask that society should give adequate importance to economically productive uses of cell phone services, at least in low-income countries. Smart phones are fun, but for many of us, they have to do their share of work!

Srinivasan Ramani 

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