When you think about the U.S. phone system, you have to be amazed! Copper and fiber wires running all over the country connecting nearly every home and business, plus all the equipment in between that makes the magic happen. Its massive and staggering in both scale and complexity.
All that infrastructure cost a fortune to create, but it must also be enormously expensive to maintain and keep up with too.
So when you think that a phone line only cost between $20 and $30 a month, it really is a pretty sweet price tag.
In contrast, cellular networks must be dirt-ass cheap to both create and operate.
Sure, you have to have lots of towers and connect them all via fiber or copper wire… but that is nothing compared to the sheer scale and fagility of the old system of wires.
Upgrading and maintaining the cell networks has to be far easier than sending technicians out to each individual home every time something needs connecting, breaks, or when construction crews dig up some back-woods line somewhere.
And never forget that once upon a time the phone companies were only able to sell one phone line per household. But cell networks can sell one phone line for each member of each household. So the entire size of their market is much larger than the size of the old phone market.
So why then does my cell plan cost $80 per line?
Sure I have data services, but I had that on my land-line once for only $10 extra and it worked a hell of a lot faster than my cell phone’s connection.
My cell phone is portable and more convenient than my land line, but the wireless aspect is what should be saving my phone company an embarassingly large amount of money.
I can call the entire U.S. on my cell phone without paying any extra, but that doesn’t cost the carrier significantly more than a local call does either.
So what am I actually getting for all that extra money? The cell phone doesn’t do anything I couldn’t do with my land line, and much of it the land line did better.
I guess the only reason my cell phone bill is $80 is because customers are willing to pay that much.
Its too bad the artificial barriers to entry are so high in the cell business. If entry wasn’t controlled by so much regulation and real competition was allowed into the cell market I wonder how much my phone bill would be now?