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Report finds lack of mobile contract choice in the US, better value in Australia

Sharif Sakr

This may come as a shock to our Australian readers, who are so used to getting ripped off, but who are we to argue with the Organization for Economic Co-operation and Development? In a study of smartphone contracts across 12 countries, it found that Australia consistently offered the best value, whereas the US and Canada penalized low-usage customers and offered just average value to the rest. Admittedly, the analysis had to set some severe parameters in order to benchmark across so many different markets and pricing models, including focusing on two handsets (the 16GB iPhone 4S and Galaxy S II) and a single month of data (February 2012, which was before the anti-subsidy trend began in the US). In any case, bear all that in mind as you read on for a summary of the report's main conclusions.

Research finds lack of mobile contract choice in the US, better value in Australia

The OECD document is long, in-depth and uses a lot of data from Strategy Analytics and other sources, but some of the more interesting findings come from the "basket" comparisons towards the end, which showed that:

  • US and Canadian customers were offered less choice on their monthly plans, as carriers emphasized long contracts with "unlimited" usage and suitably high discounts on the bundled phone;
  • Americans who had the audacity to want fewer calls and megabytes didn't make much of a saving and got worse value compared to those in other countries;
  • Across a range of different plans, Australians generally paid the lowest prices, ranging from $30 to $40, including VAT and all costs;
  • Brits fared well too, ranking 2nd or 3rd for value depending on their choice of plan;
  • Customers in Mexico, Germany, Spain, Japan and the Netherlands tended to be worse off on mid- to high-usage contracts, sometimes paying up to five times more than an Australian would for the same number of minutes and megabytes;
  • Handset costs weren't a major factor in price disparities across countries. It was mostly the other costs that made the difference.

Finally, the report also concluded that it was "usually less expensive" to buy a handset independently of a contract, where that option was available, but it was sometimes "more economically rational" to go for the bundled discount. Statisticians, eh?