Update: The CTIA has issued a statement in response to the OECD's study, stating that it is, essentially, inaccurate by way or its choice of unrepresentative calling packages. The CTIA's full statement is after the break.
CTIA-The Wireless Association(r) Responds to Organisation for Economic Co-operation and Development (OECD) Communications Outlook Report on Usage and Cost for Mobile Phone Calls
WASHINGTON, DC - CTIA-The Wireless Association(r) issued the following statement today in response to the OECD Communications Outlook report on usage and cost for mobile phone calls:
The headline from the recently released OECD Communications Outlook report reads that Finland, the Netherlands, and Sweden have the lowest prices for mobile phone calls among OECD countries, while the highest prices were found in Canada, Spain, and the United States. But since U.S. consumers enjoy the lowest per minute rates of all of the OECD countries, what today's OECD report really shows is that some international comparisons just don't make sense - especially when built on flawed assumptions.
The real story is buried on page 275 of the OECD report which states:
"It is important to note again that the OECD calling pattern in the basket can be significantly different than common calling profiles in a specific country. For example, the high-usage OECD basket includes 1,680 outgoing voice calls per year while users in the United States average 9,600 minutes of voice calls (combined incoming and outgoing) per year. In this case the basket provides the cost of buying exactly the calls and messages in the OECD basket rather than what may be considered a 'typical' bundle in the market."
Since the average U.S. calling profile is nearly three times greater than the OECD's "high usage" basket (and, in fact, the average U.S. calling profile is nearly six times greater than the OECD's "average" usage basket), it is no surprise that most other sources show the price per-call (or price per-MOU) in the United States is the lowest among the OECD countries.
How did the OECD get it so wrong?
Only by picking such unrepresentative "representative" call packages, could the OECD have reached such a result. For example, the OECD defines a "medium use" customer as someone making 780 minutes of calls a year, and sending 600 SMS and 8 MMS messages a year. And the report says that based on their methodology, a U.S. customer would pay $53 a month in order to get that level of service. But that assumed "medium" basket works out to about 63 minutes, 50 SMS messages, and less than one MMS message a month. That just doesn't reflect reality.
CTIA's semi-annual survey shows that the average wireless consumer uses around 760 minutes a month, and over 400 text messages a month. Even if we only count half of those minutes as outgoing minutes (to mirror the OECD assumption), that's still six times as many minutes as the OECD methodology assumes. Plus, the CTIA survey showed that the average monthly consumer bill is $50.07. Moreover, since the most recent CTIA survey, a number of unlimited voice and text message plans have been introduced by U.S. wireless companies providing U.S. consumers with even greater value. For example, Tracfone offers its "Straight Talk" plan of unlimited minutes and text, nationwide, any time, for $45 a month, and Boost has a $50 a month plan that offers users unlimited talk, text, web and walkie talkie service.
When you look at the price American consumers actually pay for their wireless service, our per minute rates are the lowest of all the OECD countries.