Verizon Wireless 4G & 5G are 5,000–33,000% More Expensive Per GB than Vodafone UK; Others Worldwide. Why?

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America’s communications prices — for wireless, broadband and the triple play, (phone, cable, and broadband internet) are out of control compared to other countries, worldwide. And when it comes to what Verizon is delivering, we now know that the word “unlimited” really means — “We are just kidding.” As we discussed, AT&T is playing the same confuse and rename game.

This is also a picture of the fundamental problem in America — Millions of families can’t afford these services and it has caused the Digital Divide to expand.

Verizon’s Offerings: 5G and Plans with 5GB

Verizon’s “5G Get More Unlimited” costs $90.00 (with other fees not listed) and comes with only 50GB of usage. Thus, this service costs about $1.80 a GB, (more when the taxes, fees and surcharges are applied).

Verizon’s other services, such as the $35.00 prepaid service with 5GB, comes to $7.00 per GB. Verizon also has another service for $55.00, which also comes with 5GB, for the ‘metered’, non-unlimited service, and this comes to $11.00 a GB. But you can get a ‘Data Boost’, to add 1GB for $15.00.

Vodafone Unlimited and 5G

Vodafone, in the UK, has their own unlimited plans, which are, well, actually ‘unlimited’ and cost $33.54, or $38.70 for 5G. This is about $.03 to $.04 cents per GB (Note: 1000 GB is used by some analysts because it is hard to multiply something that is ‘unlimited’.)

Verizon will claimBut we are selling a package of services. The packages include Disney and/or Hulu or Apple Music. In most of these cases, the additional services are offered for free as a gimme, and then billed 6 months or a year later, full retail. Ironically, Apple Music, like Verizon, offers a free trial and then charges $9.99, same price as Verizon. We also left out the WiFi usage, though adding it in would not seriously change the storyline. And Verizon has different pricing based on the number of users in the account. We used single lines for simplicity’s sake.

The chart below is the storyline and it reinforces visually that Verizon’s price to the customer can be in the same range, or more, but the quantity of the GB is actually ‘limited’ greatly.

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As we will discuss, we examined wireless and the triple play in a few countries for comparison. (See the chart “Summary of Findings”.) These are approximations based on the information/advertising supplied by the carriers and actual communications bills.

  • In France and Italy we found carriers offering the Triple Play for $35.00 (29.99 Euros) vs America’s $126.00 for the start (counting taxes, fees and surcharges). During year one, the US is paying almost $100 a month extra — $1,200 a year,
  • After the promotions end, the prices go up and the triple play in the US is over $200.00; We are overpaying $160 a month — $1,900 a year.
  • Using Verizon 5G and the Orange 70 GB wireless, shows that the US is overpaying $66 extra a month or $800 a year.
  • Comparing Vodafone, the US doesn’t have 1000+ GB allowances for basic wireless, but it is clear that those who are harmed are the low-volume users.
  • Cost Per Gig is the real problem. Verizon’s services charge between $1.80 and $11.00 per GB, while Vodafone’s services are $.03 and $.04 cents, respectively, and overall it came to over 5,000% to 33,000% percent difference.

There are a host of issues related to this.

  • The pandemic has exposed that there are major holes in the deployment of high speed broadband. As the school year starts, there are many households that don’t have broadband because it isn’t available or because they can’t afford it.
  • Verizon claims that 5G and wireless should be a substitute for the fiber optic networks or be used in rural areas. Based on these prices and America’s usage of the communications networks, with these data restrictions, families will use up the basic package, or won’t be able to afford it.
  • But the real issue is –Why are Verizon et al. pricing so out of whack, or the amount of GB so paltry, or the services allowed to be called “Unlimited? Vodafone’s prices for wireless are standard or even a bit high for most of Europe; but it is a land where “unlimited” actually means no blocking or slowing down of the service. In this case it means over 1000GB for $30+ bucks.

Financial and Control Issues

  • Verizon Wireless has been able to divert billions of the wireline construction budgets to pay for the wireless networks at the expense of not upgrading cities and states.
  • Moreover, Verizon controls the wireline networks, which include the networks and services known as ‘backhaul’ which are the guts of the networks and used for data or the wires to the cell sites.)
  • This creates the high profits of the wireless business, but also the ability to keep all prices inflated via inflated backhaul prices.

And the Irony

  • Rewriting the English language (or the meaning in all languages) has occurred by the phone companies who believe no one is looking or minds that their unlimited is really ‘restricted’ or ‘confined’.

STOP USING THE WORD “UNLIMITED”.

adjective

§ Not limited; unrestricted; unconfined, boundless; infinite; vast:, without any qualification or exception; unconditional.

The word “unlimited” as used by AT&T, Verizon, et al. is a farce that isn’t even funny. The joke is on customers not realizing that what they bought is deceptively advertised.

This Is the Small Print on the Verizon Website

It says that after 50GB for the $90.00 5G service, once the 50GB is used up, the speed will be slowed — Isn’t 5G supposed to be really fast?

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Ironically, this is what Vodafone uses for their description of unlimited data.

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The term unlimited gives the impression that there would be no blocking or slowing of service if wireless substituted for wireline or the building of fiber optic networks. Thus, hiding the restrictions also hides the basic fact that the companies have put in data caps, slowing down the service after the GB are finished. This is not part of the regular wired service.

Moreover, the US wireless service couldn’t handle the 400+ GB being used by Americans every month in 2020, according to OpenVault.

Pandemic-Sized Broadband Usage that US Wireless Can’t Handle

OpenVault has been collecting broadband data during the Covid-19 experience and has some new information about broadband usage. Though not surprising, with everyone home and in lockdown, the broadband personal usage went up almost 50%; the average household used 402.5 GB, as compared to 273.5 the year before.

“Findings in the OpenVault Broadband Industry Report (OVBI) Q1 Quarterly Advisory: Report

  • “The COVID-19 pandemic changed broadband usage patterns in substantial ways, perhaps permanently
  • Average consumption at the end of first quarter, 2020 (1Q20) jumped to 402.5 GB, an increase of 47% over the 1Q19 average of 273.5 GB and a 17% rise over the 344.0 GB in 4Q19.

The Rise of the “Super-Power-Couch Potato”.

There is another almost sad statistic — the rise of the heavy online user. Known as ‘power users’, they are about 10% of the population using 1–2-TB — that’s 1000GB.

  • The areas of sharpest growth during 1Q20 were power users of 1 TB or more and extreme power users of 2 TB or more. The percentage of subscribers who were power users in 1Q20 reached 10.0%, an increase of 138% over the 4.2% of power users in 1Q19.

French Providers: Orange and Free.

France has some very low cost options as compared to the US.

Free Mobile

Free Mobile wireless has a service for €12.99 which comes with 70GB — about $15 bucks and another for €19.99 with 100GB. The price of the first service goes up to $23.50 in a year, while the second is only €9.99, about $11.75 dollars, if you are a Firebox subscriber.

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Let it sink in. — $15 bucks going to $23 bucks for 70 GB. We just saw Verizon’s $35 and $55 package with only 5GB. — 14 Times Less GB; nearly double the cost.

Orange Triple Play and Wireless

Meanwhile, Orange, the legacy of the original incumbent state utility, France Telecom, features a fiber optic internet broadband Triple Play, which also comes with a mobile service that includes 70GB for €29.99, about $35.00.

That’s Fiber Broadband Internet, TV, Telephone and Mobile Service with 70GB — for $35.00. It does go up to $75.00;

§ “Fiber Internet + UHD TV + telephone + 70GB mobile plan at €29.99 / month for 12 months then €63.99 / month. About $75.00 in dollars.

§ “(Livebox rental included)

§ “Good Fiber Livebox plan €22.99 / month for 12 months then €41.99 / month. With Livebox 5. Livebox rental included.

§ “Mobile plan with 70GB at €19.99 / month. Offer valid for 12 months for new customers then €34.99 / month.”

Orange even breaks out the services, but more importantly, it supplies the actual price once the discount goes away. Thus, the Mobile plan is €19.99, though it will end up at €34.99. And the fiber optic service with “Livebox”, starts at €23 a month and goes to €42 a month.

Everyone in America is going — How much does it cost, really?

Basic Math

In the US, the Spectrum-Charter New York triple play starts at $99.99, which is the advertised price, but it actually costs about $126.00 when the first bill shows up, and ends up at $210+; and this is without the wireless service. FiOS is similarly priced.

Note: Consumer Reports 2019 Report found that the average price for a Triple Play was over $215.00 nationwide.

This means that a basic package from Orange, with 70GB wireless, ends up at €64, about $75.00 in dollars vs a Charter or Verizon FiOS triple play and the Verizon Wireless service, — costing about $300+

  • SUM: $225.00 a month extra — 300% more a month — that’s $2,700 a year.

Italy’s TIM has the Fiber Optic, 1 Gig Speed Triple Play about $35 US Dollars.

It appears that the Triple Play is only €29.99, about $35 dollars for a fiber optic broadband with Gbps speeds, offered in Italy by TIM.

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NOTE: There are some caveats about whether the location has fiber and whether the Google translation was correct, and whether the prices may increase; it was not obvious because the graphics don’t translate well,

But at $35.00 a month for the triple play, vs $210 a month, this is not a trivial amount that the US is paying, about $175 a month difference, about $2,500 extra a year. And TIM prices are similar to Orange and other providers in Europe.

Summarizing Some of the Findings:

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‘Start’ is the promotional year monthly charge; ‘1 Year’ is the first month without the discount, ‘Retail’ is 12 months — first promotion year, and ‘One Year’ is the full year charges without the discount.

On the left is Orange, France which had a package including the fiber optic triple play and mobile service with 70GB, all for $35.39, and the price went to $75.50, but you could buy each component part separately.

This is followed by the Spectrum Charter Cable Triple Play and Verizon Wireless 5G plan, and the same details for them as for Orange. Then simple math, how much was the Orange priced services compared to Verizon wireless and charter cable TV

Caveats: Yes, there are differences by country, there are different plans that come and go, different added fees, especially in America as most countries do not have a Christmas tree of added fees, and even the exchange rate of the Euro and pound change.

Conclusion

Based on this limited analysis of pulling prices off the different carriers’ websites, including Free, Vodafone, Orange and TIM — something is amiss in the US markets for our communications. America needs to come to grips with why all of our communications prices are out of control and why services can be $100-$150 a month more for the triple play (and broadband), or on our ‘unlimited’ wireless plans.

CODA

We just examined specific plans from specific providers in specific countries. To show that the pattern we laid out is not anomalous data:

Rewheel Research’s findings for October 2019 compared the speeds of the European Union and the OECD with the US, and this should send a chill down your spine. All of the lines on the right are countries with 1000+GB, and this chart is only for 30 EUROS.

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  • “The median smartphone plan gigabyte price… in the US was 14 times higher.”
  • “The median gigabyte price of 5G mobile and wireless home broadband plans — most of which packed truly unlimited volume — was 0.05 EUR/GB

Written by

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 38 years, and I have been playing the piano for 63 years.

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